Resource companies aren’t the only ones hoping for a strong recovery in China. One American franchiser gets about 25 percent of its growth from China. And in three years its profits from China are expected to match those from the U.S. It has a lot at stake in China.Last Thursday China reported that car sales in June jumped 48 percent, helped by tax and financing incentives. If Chinese consumers are regaining their appetite to spend again, this American food franchiser will be a big beneficiary. By the end of 2008 it was operating 3,000 restaurants in China. And it’s adding 500 more this year.

If you’ve ever gone to KFC, Pizza Hut, Long John Silver, or A&W All-American Food Restaurants, then you know this company. Its name is Yum Brands (YUM) and it reports today on its second quarter earnings. Analysts expect YUM with its cheap fast-food chains to do better than most American companies. It’s expected to earn 43 cents per share on revenue of $2.5 billion, a touch below what it did in the same quarter of last year.

Yum has the right formula to do well in the current recession. It’s aiming for stability in its U.S. sales and growth in its overseas sales.

We should get confirmation today that its formula is working. I expect YUM to post strong earnings from its China operations that will help it exceed expectations.

Yum is one of the few companies with the right portfolio and geographical reach to do well during this recession. Cheap food plus strong overseas expansion equals a buy in my book.