China gets tough with fast food

The Chinese think that McDonald's Corp. (NYSE: MCD), KFC, and Yum Brands Inc.'s (NYSE: YUM) Pizza Hut don't pay their workers enough. The Chinese officials need to come to the U.S. and look at the pay stubs for the people who work at those fast food chains here.

Since McDonald's has almost 800 restaurants in China and about 50,000 employees, the stakes of getting in a fight with the Chinese government are fairly high.

The lesson emerging for U.S. companies in China may be a very hard one. If they want the revenue from the huge, rapidly growing market, the price may be getting pushed around by the government. Several large U.S. companies like Wal-Mart Stores Inc. (NYSE: WMT) have tremendous operations in China. The employees in the Wal-Mart stores there are unionized now, and it is unclear what the union plans to do.

There is a case to be made that the Chinese government wants big U.S. firms to invest large sums in moving into China which would allow the government to make demands on wages and revenue taxation.

What will the U.S. companies say after having invested billions of dollars to get into the hot market? Where do we send the check?

Douglas A. McIntyre is a partner at 24/7 Wall St.