As Jim Cramer watched the averages plummet again on Wednesday, he kept thinking how everything goes back to China.
"When it comes to everything from aerospace and elevators to consumer packaged goods to coal to oil, and now computers and cellphones, if it's sold in China, it's getting clobbered," the "Mad Money" host said.
Over time, Cramer has seen that China was regarded as the land of dreams of growth for many companies out there, and now that thesis is falling apart after the Chinese stock market crash earlier this month.
In fact, Cramer interpreted the crash as a sign that growth had finally peaked in China. And even as its market has stabilized since, money managers now think it is nothing but downhill from here.
"China, mighty China, is now regarded as a paper tiger," Cramer added. (Tweet This)
For instance, Apple was the subject of heavy speculation on Tuesday after reporting one of the greatest quarters that Cramer had ever seen. However, China has become an ever larger part of Apple's growth, and its CEO, Tim Cook, was straightforward in admitting that the People's Republic will ultimately become one of its biggest markets.
But it was the language that Cook used in Apple's conference call on Tuesday night that piqued Cramer's interest. Cook said that China would remain pretty much the best story out there for years and years because of its tremendous middle-class growth, but there will be "speed bumps" along the way.
It was as if investors everywhere heard the words sell, sell, sell as soon as he said that. They didn't want speed bumps from China. They already have them everywhere else!
Cramer translated this to mean that China is hurting after the market crash. Therefore cellphone demand has peaked, and Apple instantly lost $60 billion in market cap.
Simply, the world isn't growing fast enough to make up for what is perceived as slowing iPhone sales. China was supposed to pick up that slack, but didn't.
"I've learned my lesson many a time with Apple. Whenever estimates get out of hand, as they did with these over climbing cellphone estimates coupled with some sort of global shock—this time the Chinese stock market—Apple's stock will overreact," Cramer said.
And it was the same stories from United Technologies, B/E Aerospace and the miserable numbers reported by auto companies on Tuesday. All of these companies banked on China's growth, and are now hurting.
Let the impact of China percolate through the market. China may have stabilized, but now it's time to let the worriers and downgraders have their way. If Apple were an expensive stock, Cramer would worry. But it only trades at less than 13 times next year's earnings, so he's not.
"Instead I say sit back. Watch. Don't do a thing. Not yet. Let the sellers sell, the panickers panic. Don't bother to help them. You'll get better prices if you wait," Cramer said. (Tweet This)
Read more from Mad Money with Jim Cramer
Cramer Remix: Sold this? Here's your dunce cap
Cramer: Why I was so wrong about oil
Cramer: Apple is ready for a downgrade
Even oil has been impacted because China doesn't use much of it. Investors will know when these stocks bottom because they will bounce quickly. Cramer says to wait, and be ready to buy when they flip.
If the company does business in China, Cramer has now declared it soft, weak and slowing as the world figures out that China is done growing faster than everyone else.
But if it doesn't have Chinese exposure? Unless it severely disappoints, Cramer will be ready to buy, buy, buy.