The January panic in China continued on January 7, with the government finally scrapping the market circuit breakers that could not stop the selling.

But it is important to note that what is happening there, so far, is a slowdown and not even a recession. One way to do this is by looking at Baidu (NASDAQ:BIDU), the equivalent of Alphabet Inc-C (NASDAQ:GOOG) in China.

Baidu does not have the same dominance in China that Google does elsewhere, but it offers many of the same services, and has been achieving some of the same success. YoY revenue growth is at 36%, and the company has been investing ahead of this growth, which is why profits were actually down by one-quarter between the last quarter and the same period a year ago.

Source: Baidu net income chart by amigobulls.com

Baidu isn’t just the Google of China. It is also its Amazon (NASDAQ:AMZN), an e-commerce giant with a great phone app. The company’s alliance with Amazon includes acting as a default search engine for Kindles there, and providing software that makes the cheap tablet a compelling choice.

In China, the Internet market is a race to secure niches that already exist in the U.S, under the protection of a government that can seize assets, and people, with an impunity more common to Africa or the Middle East than a developed country. Thus Baidu is trying to get into auto insurance, in this case built around its mapping application. In addition to being its GEICO, the company also wants to be China’s Nuance Communications (NASDAQ:NUAN), with a Siri-like interface that is entirely based on machine learning. It wants to be seen as the equal of its American rivals, which is one reason it’s going into self-driving cars.

There are a lot of good things happening here, in short, and while it would be foolish to take recent buy recommendations at face value, at least until the entire Chinese market settles down, it’s probably as resistant to the downturn as any stock on that country’s board, with Baidu's stock price down just 15% in the last month. If you open the chart up, as they say, you’ll see that Baidu stock price followed the market’s August swoon with a march toward new highs by the end of November.

Source: Baidu stock price data by amigobulls.com

Baidu’s balance sheet at the end of September showed it with over $10 billion in cash and short-term investments, plus a debt-to-assets ratio of just 29%, which should be plenty of financial strength to get through the current times. China’s government is trying to transform the economy from one driven by manufacturing to one driven by consumers, and consumers use Baidu.

When the smoke clears in the Chinese market, when there is some certainty that the whole is bottoming, with slower price swings, this is the kind of stock to buy if you want exposure to that country.

Image License copyright Flickr