Fast food chain McDonald’s will spend $3 billion this year opening 1600 new outlets worldwide – a big share of them in China.

McDonald’s says China, where it has more than 2000 outlets, offers strong potential for fast food as the nation’s middle class expands.

“We feel we have got a sound strategy. We’re being strategic on our openings. We’re being strategic on our menu pricing and our points of distribution,” said McDonald’s CEO Don Thompson.

The company is now targeting second-, third- and fourth-tier cities where rents are lower than first-tier cities and consumers have a strong appetite for American goods.

McDonald’s is competing tightly with American peer Yum! Brands which has more than 4400 restaurants in China.