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Cramer: China changing economy ‘on the fly’

China's economic transformation: Cramer

China is quickly remaking its economy, according to CNBC's Jim Cramer.

"They're changing this economy on the fly," Cramer said on CNBC's "Squawk on the Street " Tuesday. "They are making this into an internal consumption economy [from an exporting economy]."

Read More Is the era of 7% growth over for China?

Cramer made his remarks after China's fourth-quarter gross domestic product remained at 7.3 percent. "I was looking for 7.1 percent," Cramer said. "You may think that's horrible, but I was afraid it would go to 6 percent. I think the Chinese Communist Party is trying to cut excesses everywhere."

The comments also came after the International Monetary Fund slashed its economic growth outlook from 3.8 percent growth this year and 4 percent growth in 2016, to 3.3 percent and 3.7 percent, respectively.

Read MoreIMF slices global growth forecast for 2015

Nevertheless, Cramer said he believes the Chinese are doing right by their economy as they cut down margins. "I know it doesn't sound rational to try and slow an economy down, but I think the Chinese are doing a lot that's right," he said. "That's why I don't expect to see many of our companies to crater on a so-called Chinese slowdown."

—CNBC's Ansuya Harjani contributed to this report