China currently represents 20% of the company's operatingprofit, and management forecasts that number will increase to 40%by 2017. Profit in the country has grown from $120 million in 2002to $365 million this year.

A majority of the growth will come from its KFC chain, whichcurrently has just under 2,000 restaurants in China. Novak seesthat brand's expansion not just in major Chinese markets but in 500cities across that country.

Yum's Pizza Hut chain, which he compared to a casual-diningexperience in China similar to Applebee's in this country, couldreach 2,000 units from its current portfolio of just under 300locations. And the company is also rolling out East Dawning, aChinese-food chain which will have 50 stores by year end. Novaksaid that concept has the capability of becoming the McDonald'sChina.

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