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When Chinese president Hu Jintao visited the U.S., some people saw it as a sign that China is ready to do more business and be more cooperative with the U.S., Jim Cramer told viewers of his "Mad Money" TV show Friday.

But he said that the visit won't stop intellectual property abuses and closed-off markets on the mainland. Moreover, he cited a

Wall Street Journal

article saying that China is boosting its defense spending. Plus, the article said that the Chinese military could outpace America's military in the years ahead, specifically in terms of submarine might.

The best play on possible military threats from countries like China, as well as the war in Iraq, is

General Dynamics


, he said.

Of all the defense companies, he likes General Dynamics because it reported a "magnificent quarter," and he sees a lot of growth for the company.

Not only is the U.S. government buying its combat vehicles, the company's business jet unit is booming.

New maintenance regulations have been passed for jetliners, and that could mean faster retirement of some planes, Cramer said. This could also cost the airline industry an extra $325 million over the next 20 years.

While this is "just another reason to sell airline stocks," he also said that there's a way to make some money.

Cramer said he would consider buying



, a company that takes care of maintenance, repair and construction for the airlines.

If the airlines need to spend millions more on maintenance, then money should go to AAR, he said. AAR just opened an office in Shanghai. He said that there should be a lot of growth there because China is just now repairing, rather than replacing, airline parts.

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And the company is not unionized, he said, so it can offer its services for about two-thirds the cost of a union shop.

This will make AAR the attractive option for airline companies, as they are forced to increase spending in repairs.

Passing the Drug Test

The New York Times

ran a story on a drug test in Britain that nearly killed six participants, and that report led Cramer to wonder which companies conduct drug tests right.

The best-of-breed company for clinical trials, he said, is

Pharmaceutical Product Development


, which he called the best contract research organization on earth.

The company reported 27% earnings growth last quarter, and Cramer said that's "almost Google-licious."

Pharmaceutical Product Development also does more than testing. It takes a stake in the drugs it believes will work, runs phase I, II and III clinical trials and manages data from studies. The company also runs postmarket registries for dangerous drugs and does some marketing, he said.

He said that he wouldn't have recommended the stock a week ago, but now that

C.R. Bard



Quest Diagnostics


have reported and their stocks moved up, he thinks now could be a good time to buy Pharmaceutical Product Development.

The company also has some good contracts, including a five-year deal to run clinical research on HIV, as well as testing on diabetes and premature ejaculation treatments.

Caribbean Cruising

Cramer said that he used to believe that

Royal Caribbean


should trade at a discount to rival



, based on the belief that Carnival is a more reliable company.

But this week Royal Caribbean reported a quarter so good that he changed his mind; and the company's president, Adam Goldstein, joined Cramer to discuss his company's most recent earnings report.

Goldstein said that, overall, the Caribbean will remain a healthy region.

Cramer pointed out that Carnival said business in the area is bad, but Goldstein said that his company sees growth in the Caribbean, even though it has been a "sensitive" segment of its business.

Goldstein added that his company has gotten more money from passengers by ratcheting up onboard spending.

To view Cramer's interview with Goldstein, please click here.

Lightning Round

Cramer was bullish on







Crystallex International












UnitedHealth Group



Cramer was bearish on

Tanzanian Royalty Exploration



Deckers Outdoor









International DisplayWorks



Jabil Circuit



Zoltek Companies









For more of Cramer's insights during the Lightning Round, click here


Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by

clicking here


At the time of publication, Cramer was long Cephalon, UnitedHealth Group and Yahoo!.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or is related to the specific opinions expressed by him on "Mad Money."

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