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When the world's biggest McDonald's was told to close in China

Twenty-five years ago, the U.S. burger giant found itself having to close its largest outlet in the world on short notice.

In 1994, City of Beijing wanted McDonald's to vacate property where company had signed 20-year lease

A McDonalds was shutting down in China abruptly, just two years after it signed a 20-year lease. 2:16

McDonald's didn't like what was being served, and the feeling had nothing to do with its menu offerings.

Twenty-five years ago, the fast food company found itself being told to close its largest outlet in the world, in the capital city of the most populous country in the world.

Because just two years after McDonald's had opened the doors of its high-profile restaurant near Beijing's Tiananmen Square, it was being told it had to relocate its operations. 

"The City of Beijing is breaking the 20-year lease it signed with McDonald's to give the site to someone else," the CBC's Patrick Brown said, when giving the backstory to viewers on The National near the end of November in 1994.

'A different way of doing business'

In 1994, McDonald's was told it had to close its largest outlet in the world, despite the fact that it was only two years into a 20-year lease it had signed with the City of Beijing. (The National/CBC Archives)

Brown said some adjoining land was part of a planned land development, led by a billionaire who had close ties with the Chinese government.

The story made the news because it wasn't just any company being asked to make a change to its plans: It was McDonald's, the iconic American burger behemoth.

Philip Carmichael, the president of the American Chamber of Commerce in Beijing, said the developments involving McDonald's could be a cause for concern by other foreign businesses.

"It is a signal that there is a different way of doing business in China than just following laws and rules and regulations," he told The National, declining to comment on the details of the McDonald's situation.

Growing ties between Canada, China

The McDonald's outlet that Beijing said had to close was the largest in the world, as of late 1994. (The National/CBC Archives)

From a Canadian perspective, Brown said the story might concern a series of Canadian businesses that had recently made inroads in the Chinese market.

"Earlier this month, Prime Minister Jean Chrétien presided over a signing frenzy, as dozens of Canadian companies and their Chinese partners put their names to contracts, letters, agreements and memoranda," said Brown.

"The McDonald's eviction is a reason to wonder which ones will be worth the paper they're written on."

Still, it was not as if Chinese consumers were being deprived of McDonald's food: Brown pointed out there were more than 20 other McDonald's outlets operating in China, with another 10 then slated to be opened in Beijing the following year.

In the end, McDonald's would not actually end up moving its flagship Beijing operation for several years. 

The New York Times reported in December 1996 that the company would finally be vacating the location "after resisting a government removal order for two years." The newspaper said McDonald's was to receive compensation for having to relocate.