In the past, export companies and commodities have been the biggest beneficiaries of Chinese growth, but Lowcock (pictured) says this is in the process of changing.
"By 2020, China will have 167 million households with annual disposable income of between $16,000 and $34,000 – more than 10 times the current number of households with that level," Lowcock said. "Out-going prime minister Wen Jiabao has announced that domestic consumption is the key to unlocking the full potential of the demand from this growing middle class."
"To help achieve this goal, China will boost fiscal spending in 2013 to $2.2 trillion. The government expects to deliver growth of 7.5 per cent in 2013, down from 7.8 per cent in 2012."
Lowcock adds that the potential upside in China is significant because so many people in the country are still living on depressed salaries, something that is expected to rise with the support of the current government.
"Economic data shows early signs the Chinese have avoided a ‘hard’ landing," Lowcock continued.
"China has now surpassed the US as the world’s largest trading nation, adding yet another accolade to its growing list. China is the world’s biggest energy user, biggest car market, largest exporter and holder of the largest foreign currency reserves."
"The country has started the transition from a manufacturing exporter to a more developed consumer economy, a process which was never likely to be smooth. In addition, GDP growth at 7.8 per cent appears to have reached a bottom."
Lowcock flags up three funds in particular he believes are well placed to take advantage of growth in the consumer market in China.
Jupiter China
"This fund has a bias towards small- and medium-sized companies in the domestic Chinese market," Lowcock said.
"This makes the fund a more volatile investment than many others in the sector. This has made it particularly vulnerable to souring sentiment towards Chinese equities."
"However, after a long period of poor performance, the Chinese market appears to offer good value and there has been an upturn recently, which has benefited the fund."
"A focus on consumer stocks, construction and environmental technology means the volatility is likely to continue, but for those bullish on the outlook for China, we believe the fund offers a good way to gain exposure."
The £198.7m Jupiter China portfolio, headed up by Philip Ehrmann, has underperformed the IMA China/Greater China sector over one, three and five years.
Over three years it has lost 5.79 per cent, while the sector has gained 7.5 per cent.
It has also underperformed its benchmark, the MSCI Zhong Hua index, which has made 17.45 per cent over the period.
The fund has begun to recover over the past six months, picking up 31.46 per cent. The sector and index each gained roughly 24.4 per cent over the period.
Performance of fund vs sector and index over 6 months
Source: FE Analytics
Jupiter China requires a minimum investment of £500 and has a total expense ratio (TER) of 1.78 per cent, according to FE Analytics.
First State Asia Pacific Leaders
Angus Tulloch’s five crown-rated portfolio is one of the best performers in the IMA Asia Pacific ex Japan sector over one, three and five years.
Over the last half-decade, the fund has made 75.58 per cent, while the sector is up 50.41 per cent.
The First State portfolio has also significantly beaten its MSCI AC Asia Pacific ex Japan benchmark over the period, with less volatility.
While First State Asia Pacific Leaders can invest across the Asia Pacific region, Lowcock says it has a relatively high weighting to China, which leaves it well-positioned to benefit from any surge in consumer demand.
"This fund has about 30 per cent invested in China and provides investors with a defensive and diversified way to access China," Lowcock said.
"Tulloch and [co-manager] Alistair Thompson continue to maintain their defensive positioning with the focus on companies which have pricing power, strong cash-flows and low debt levels."
"Broadly, in their view, the China consumption story remains intact."
"However, whilst China looks cheap on the surface, there are areas which remain very expensive, for example, domestic consumer staples."
The fund requires a minimum investment of £1,000 and has a TER of 1.55 per cent.
Newton Emerging Income
"The fund was launched in October 2012 and has got off to a flying start," Lowcock said.
Since launch, the Newton portfolio has outperformed both the IMA Global Emerging Markets sector and the FTSE All World Emerging index, gaining 16.93 per cent over its short history.
Performance of fund vs sector and index since launch
Source: FE Analytics
The £174.5m fund is yielding 3.42 per cent.
"It has around 20 per cent invested in the main Chinese markets. While the developed world continues its struggle with heavy debt burdens and ageing populations, managers Sophia Whitbread and Jason Pidcock believe the future for emerging markets is bright."
"They like the emerging consumer story, which they say is easier to play in emerging markets than Asia alone because there are more yielding stocks in emerging markets."
The fund requires a minimum investment of £1,000 and has a TER of 1.6 per cent.
In an article earlier today, FE Alpha Manager Bradley George highlighted the commodities that are set to benefit from China’s next phase of growth.