AT THE beginning of May, the president of McDonald's International boasted the American fast-food giant would open 10 more outlets in China before the year was out. But that confident prediction has not materialised. Six months later the company has opened just three more restaurants and scaled down its year-end plans, although it remains upbeat about its future in the world's largest consumer market. At its most optimistic, McDonald's now sees only four more of its restaurants opening this year. But even this goal looks increasingly unlikely as 1993 draws to a close. The problem has nothing to do with the popularity of the ubiquitous burgers - the Guangzhou restaurant holds the world record for busy McDonald's opening days with 14,123 transactions. This compares with 13,124 transactions at the chain when it opened in Beijing. According to McDonald's, the problem has everything to do with quality control. ''We want to be the best, not the first. McDonald's has a long-term focus in China,'' said James Chu, vice-president of McDonald's China Development Co. ''Before we move into any city, even in China, we do a thorough survey of the market and look particularly at purchasing,'' Mr Chu said. He said that if local supplies could not be guaranteed, then McDonald's worked at setting up a supplier of its own. McDonald's blamed supply difficulties for the delay in establishing its first outlet in Shanghai. It concedes things are taking longer than it first thought, and Shanghai is not one of the restaurants planned to open before the end of the year. Mr Chu said he hoped to open the Shanghai restaurant next year, but would not give a precise date. ''We have developed very rapidly and further rapid growth is our goal,'' said Mr Chu. McDonald's restaurants are situated around Guangzhou and Beijing. This enables the company to organise suppliers and transport. But expansion beyond these two cities appears beset with problems. One of the greatest problems facing operators who want to establish chain stores is finding sites, according to analysts. But Mr Chu denied that this was a problem. In Beijing land prices are the highest in China, and land is hard to come by. McDonald's would not comment on any of the terms of land acquired, but a former China-based executive of a fast food chain said real estate proved the biggest thorn in the side of fast food chains. ''In Beijing, Kentucky Fried Chicken is having difficulty expanding the number of its restaurants. McDonald's seems to be more interested in property - they have a different approach,'' said the executive. Finding out how well the chain is doing in China is difficult. McDonald's refused to disclose any details of its joint-venture arrangements. Other information which is freely available from other multinationals in China - including the amount of investment; the amount invested in each restaurant and rent paid is considered confidential by McDonald's. But Mr Chu said business was profitable in China. McDonald's in Shenzhen accepts both Hong Kong dollars and yuan, while elsewhere in China it only accepts yuan or foreign exchange certificates (FEC). McDonald's refused to disclose what proportion of sales are in yuan or FEC. As most of its raw materials are sourced in China, hard currency requirements for the fast-food chain are small, and exposure to currency fluctuations is, therefore, limited. The only ingredients which are imported are special sauces and toppings. Over 90 per cent by value of McDonald's supplies in China are from locally-based companies. Of these, five were created solely to supply the company. They include HUSI and SIMPLOT which respectively supply meat and potatoes to stores in the north of the country. McKey supplies meat in the south, and Beijing Bama Pie supplies pies. The other company, HAVI, is a distributor. Besides these companies, another 47 also supply McDonald's. Profits generated from business are being used for reinvestment in China, according to Mr Chu. Labour is also an area which McDonald's appears to have had problems. There was industrial action in Beijing after workers complained about low pay. Sources said workers receive between two and three yuan per hour. (On these wages, they would have to work for three to four hours to be able to afford a Big Mac in Beijing, which costs 8.50 yuan). Even so, observers said that McDonald's wages compared favourably with those of other jobs in Beijing.McDonald's refused to confirm how much it paid its workers, but said the industrial action in Beijing had been an isolated incident. On the up side, 20 people from Beijing have already attended its so-called ''Hamburger University'' in the United States, an institution set up by McDonald's to train its staff. Initially, staff were brought in from overseas to open restaurants. For example in Xiamen, McDonald's brought in people from McDonald's Taiwan to train the local staff, but the restaurant is now run entirely by locals. By the time the second and consequent McDonald's opened in China, management staff would be transferred from established outlets to train staff. These days, even Ronald McDonalds, the clown mascots used to promote the outlets, are recruited locally.