Financial advisory and investment firm Viking Investments plans incubating companies focusing on retail and service providers for consumers in China.

“It is anticipated that the Chinese economy will experience substantial growth in the coming years, and we do not anticipate a lack of incubation opportunities,” said CEO Tom Simeo.

“We hope to be inspired by the innovations happening in the technology sector of the United States and worldwide and to develop companies that can similarly serve the emerging market needs in China.”

Consumer spending accounts for roughly 35 per cent of China’s GDP, with a stark contrast to the 70 per cent of US’ GDP which results from consumer spending.

McKinsey Global Institute (MGI)’s report says that strong middle class consumers will continue to emerge in China. As the income of China’s middle class rises dramatically, so will its consumption, making China the third largest consumer market in the world by 2025, it says.

A key characteristic of China’s new middle class will be that these households will have passed the thresholds where necessities such as food and clothing constitute the bulk of their purchases; these people will be able to spend a larger proportion of their income on discretionary items, significantly changing the pattern of spending in the economy.