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Written by: Staff

SHANGHAI, Mar 27 (Reuters) Time Warner Inc.'s studio division Warner Bros. plans to open some 200 stores in China over the coming years as demand for branded merchandise increases in China, the Chinese partner of the firm's consumer products unit said on Sunday.

Warner Bros. opened its first China store in Shanghai on Sunday, which is operated by a subsidiary of ports-to-telecoms conglomerate Hutchison Whampoa Ltd.'s toy production unit Hutchison Harbour Ring.

''In the long run, we would like to open no less than 200 stores.

During the next few years, we would like to make 200 as a target,'' Michelle Chan, Hutchison Harbour Ring's managing director, told a press briefing.

The companies plan to open the stores in mainland China, Hong Kong and Macau, starting off in Shanghai's commercial centres and moving on to other cities such as Beijing, and southern China's Guangzhou and Shenzhen, Chan said.

China's growing population of consumers with excess cash to spend has attracted the likes of Warner Bros. and Walt Disney Co. to China, as they look to cash in on the growing popularity of their trademark characters like Mickey Mouse and Bugs Bunny.

Disney already sells its merchandise in China through some 2,600 retail spaces in larger stores like Carrefour, and aims to increase the number of such shops to about 6,000 by 2009.

Warner, Disney and their competitors are all chasing a China market where consumers are expected to spend about 100 billion yuan ($12.5 billion) on toys by 2010, driven by the country's 300 million children below the age of 14, according to official forecasts.

But the big mark-ups for the famous-character products, along with the widespread availability of fakes, mean the sellers could face a long uphill battle in China, analysts say.

Warner Bros. however hopes that consumer demand for their authentic merchandise will increase as more licensed products become available in the Chinese market, and says knock-off products have already helped consumers to get familiar with their characters.

''The best testimony we can have to the popularity of our characters is that manufacturers desire to put those characters onto merchandise,'' said Jeffrey Whalen, senior vice president with Warner Bros.' consumer products unit.

($1=8.0300 Yuan) REUTERS SD KN1437

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