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China is in the middle of a transition: Schultz

Howard Schultz, chairman and CEO of Starbucks
Adam Jeffery | CNBC
Howard Schultz, chairman and CEO of Starbucks

Starbucks is expanding its presence in China as it announced it plans to add 500 stores a year for the next five years.

"We've been in China now for 17 years," Starbucks CEO Howard Schultz told CNBC's "Closing Bell" on Tuesday.

"We've had 10 years of consecutive positive [comparable] store sales, which is pretty stunning."

Schultz notes that while there's been some economic turmoil in China, the coffee giant's traffic has remained positive. He considers betting on China now as an opportunity to invest ahead of the growth curve.

Despite fears of a volatile Chinese economy, "people should not mistake market moves for economic changes," Schultz said.

"China is clearly in the midst of a period of transition, but it's necessary for the next stage of their development," he said.

In an effort to strengthen commitment with employees in China, the company also announced that starting this month full-time baristas and shift supervisors who have been with Starbucks China for at least six months will receive monthly financial assistance.

"Many of our young people are travelling great distances to work in our stores," Schultz told CNBC. "As a result of that we announced ... a significant housing allowance."

The coffee company claims that the subsidy is expected on average to cover 50 percent of the participant's housing expenditures on a monthly basis.

Starbucks stock rose almost 3 percent Tuesday.