By shifting the focus of its economy towards consumption, China is essentially putting a billion new consumers into the world market and the impact is likely to be dramatic, says the chairman of global exporter Li & Fung.
"Something very interesting is going on in China comparable to 1979 when Deng Xiaoping opened up China," William Fung told CNBC on Wednesday, referring to the former Chinese leader who opened up the economy and paved the way for a period of spectacular growth.
"What's happening now with China switching gears and emphasizing the consumer market is like China putting a billion new consumers into the world's consumer market and I think the impact will be just as dramatic [as 1979]," he added.
In order to put China's economy a more sustainable growth path, Beijing hopes to move the economy from one driven by investment to one where domestic consumption plays a much greater role.
Fung said a rise in the minimum wage was one example of the steps taken to boost consumption in the world's second biggest economy.
"The way China is looking to boost consumer spending is astounding. They are going to boost the minimum wage by 13 percent a year every year for five years…. I don't know if people realize how dramatic that is," he said.
Earlier this week, Chinese media reported that that monthly minimum wage in three cities – Beijing, Shanghai and Tianjin – will rise between 11.4 percent and 12.3 percent, Reuters reported.
China is now not just a country from where products can be sourced, but also one to which products can be sold, Fung said.
Li & Fung is a consumer goods exporter and it supplies retailers such as Wal-Mart and Kohl's with clothing, toys and other products. It is also one of Hong Kong's largest trading companies.
Brighter U.S. outlook
In a joint interview with CNBC, Fung and Bruce Rockowitz , Li & Fung CEO, said they were bullish about the U.S. economic outlook.
"People are spending, but we won't see a big robust increase because we have been going through a process of getting rid of debt – personal debt and government debt," Rockowitz said.
"Over the next three years we are bullish on the U.S. We are not looking at a strong recovery overnight but it will incrementally get better," he added.
The U.S. economy averaged growth of about 1.9 percent last year after expanding 2.8 percent in 2012, according to government data.
Asked about plans to spin-off Li & Fung's brands and licensing unit, Rockowitz said he could not give a timing on the move.
"We said it would happen this year, we don't know on the timing," he said.