Cramer makes a big change and now likes two other Chinese stocks in addition to Alibaba

Published Tue, Nov 3 202011:29 AM ESTUpdated Tue, Nov 3 20201:29 PM EST

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

(This story is for CNBC Pro subscribers only.) CNBC's Jim Cramer said Tuesday that Alibaba isn't the only Chinese company that investors should consider, pointing to the strength of the consumer in the world's second-largest economy. The comment marked a change in thinking from the "Mad Money" host, who has long maintained that e-commerce giant Alibaba was the only Chinese stock he felt comfortable recommending. China has Covid-19 under control and "they have got a very strong economy," Cramer said in explaining his reasons for the shift. The coronavirus originated in China late last year. However, the communist government took quick extraordinary steps to mitigate the outbreak, including aggressive, long-lasting lockdowns, thousands of health checkpoints and mass testing. Many Western countries, including the U.S., did not act as rigorously or as quickly, leading to a pandemic that is surging again as the weather turns cold. For the first time, Cramer said he's recommending JD.com , an e-commerce giant that competes with Alibaba, and internet search giant Baidu , on the belief that they stand to benefit as the Chinese economy continues to recover from the coronavirus crisis. JD.com has duel listings on the Nasdaq in the United States and in Hong Kong, where it debuted in June . Baidu, which was one of the earliest Chinese firms to list in the U.S., completed its initial public offering in 2005 . It also trades on the Nasdaq. "China is on fire," Cramer said on "Squawk on the Street," in explaining why he believes these companies are now investible. He maintained that he believes Alibaba is worth buying, too. While saying JD.com might be a better play, Cramer noted that the steep decline in Alibaba shares Tuesday could provide investors with an attractive entry point. "That's why I thought it was an opportunity" to also buy Alibaba, he added. Alibaba, which is listed on the New York Stock Exchange and in Hong Kong, was sliding over 6% on Wall Street after Ant Group's expected record-breaking IPO in Shanghai and Hong Kong was suspended . Alibaba owns about one-third of Ant Group, a financial technology company. Ant Group's controller, Chinese billionaire Jack Ma, co-founded Alibaba. The Shanghai Stock Exchange said Ant Group reported "significant issues," which means it may not meet the conditions for listing or "information disclosure requirements." Other Chinese stocks that trade in the U.S., including JD.com and Baidu, were also lower on the announcement. Potential regulatory shifts could be "disastrous" for Ant Group, Cramer said. "But I don't necessarily want to write off Alibaba because it's a play on the consumer. That's why I do like JD more." Cramer also said the general strength of the Chinese economy is a positive sign for U.S.-based firms with significant exposure there. He added that a potential win by Democrat Joe Biden in Tuesday's presidential election could be a bullish sign for those firms. President Donald Trump has been an ardent critic of China, accusing it of unfair business practices and instigating a back-and-forth trade war that resulted in billions of dollars of tariffs being placed on each others goods. The U.S. has also singled out some Chinese tech firms, such as Huawei and TikTok's parent company, ByteDance, as national security risks, and has threatened to delist Chinese stocks from U.S. exchanges. "If you can get something related to China and the strength of China, you've got a winner," Cramer said. "Now if you want to go even further and talk about Vice President Biden and what happens if he gets in, then you have this coronation of American companies." Despite Tuesday's declines, shares of Alibaba and JD.com were up sharply in 2020, with year-to-date gains of over 37% and 130%, respectively. Baidu's gains of 5% this year were more muted.

American Chinese e-commerce company JD.com logo is seen on an Android mobile device with a Christmas wrapped gifts in the background.

Miguel Candela | SOPA Image, LightRocket | Getty Images

(This story is for CNBC Pro subscribers only.)

CNBC's Jim Cramer said Tuesday that Alibaba isn't the only Chinese company that investors should consider, pointing to the strength of the consumer in the world's second-largest economy.

The comment marked a change in thinking from the "Mad Money" host, who has long maintained that e-commerce giant Alibaba was the only Chinese stock he felt comfortable recommending.

China has Covid-19 under control and "they have got a very strong economy," Cramer said in explaining his reasons for the shift.

The coronavirus originated in China late last year. However, the communist government took quick extraordinary steps to mitigate the outbreak, including aggressive, long-lasting lockdowns, thousands of health checkpoints and mass testing.

Many Western countries, including the U.S., did not act as rigorously or as quickly, leading to a pandemic that is surging again as the weather turns cold.