4 Stock With Safe China ExposureChina’s growth rate is slowing but that doesn’t mean U.S. investors need to entirely flee for the exits; at least that’s the view of Sarat Sethi of Douglas C. Lane associates. Sethi is playing China via U.S.-based companies that have already developed an infrastructure in China. Specifically he likes American juggernauts already established there that can take advantage of the changing demographics associated a growing economy.

Leaving aside the temptation to comment on how growing economies compare to the situation we have in the States, let’s just cut to Sethi’s stock picks:

Yum! Brands (YUM): The old spin-off of Pepsi’s (PEP) casual dining segment, YUM has been in China for decades, giving them a critical infrastructure advantage in the inscrutable ancient land. Sethi says Yum only does 20% of their business in the U.S., with the rest split between China and the rest of the world. The company trades at 14x earnings with 10% growth. While that isn’t howlingly cheap it’s enough of a value to get investors interested once the markets become “stock specific” again.

McDonald’s (MCD): China is a “small piece of a big pie” for my longtime favorite holding. That makes the Chinese market more of an incremental story than a true driver of the McDonalds story. Sethi compares MCD’s and Wal-Mart’s (WMT) Chinese business exposure as big enough to help but not so huge as to move the needle much on their total business.

What Yum and Micky-D’s have in common that appeals to Sethi are strong brands, pricing power to offset input costs, and the fact that what is junk food in the States is regarded as casual dining in China. The distinction is a function of slightly nicer interiors and, again, an upwardly mobile economy. The Chinese middle-class is expanding, taking fast food customers from street vendors to sit-down eating in a clean store. A big difference.

Two other favorites of Sethi’s are Qualcomm (QCOM) and 3M (MMM). A play on mobile growth and manufacturing, respectively, QCOM and MMM have the infrastructures and brand power, at least on a corporate level, to withstand the capricious approach of the Chinese towards foreign concerns.

Four China plays that aren’t reliant on the Chinese equity markets or the country’s industrial growth rate. How are you playing it? Let us know in the space below.