After watching City beat his team 2-0 in an entertaining pre-season friendly at Eastlands on Saturday, Emery claimed City were clearly potential champions and could also establish themselves as one of the biggest clubs in the world.
"On a world-wide scale Manchester City are being viewed as the only other team to be compared finance-wise with Real Madrid," he told a post-match news conference.
"They might have even have gone beyond Real Madrid in terms of their transfer budget and who they have signed. I think they are really looking to become among the biggest top three clubs in the world according to the investments they are making.
"That investment is leading them to get a squad together of really great players. They have basically creamed off the best players from around the world and they are clearly on their way to being a clear candidate to win the title here in England."
City, the world's richest football club, have splashed out about 300 million pounds on a host of quality players since Sheikh Mansour bin Zayed Al-Nahyan of the United Arab Emirates took over the Manchester club in 2008.
BEST PLAYERS
Asked how long it might take City to win the domestic title or European Cup, Emery replied: "A lot more goes into winning titles and the Champions League than just investment in players.
"They are getting the best players and are on the right road. There are other factors, obviously you need to gel those players into a team, but certainly potentially, they are on the same level as Manchester United and Chelsea in this country."
Among the players City have purchased is David Silva from Valencia and Emery has no doubts the winger who tasted World Cup success with Spain this year will be a success in England.
"As a guy he will have no problems settling into the dressing room atmosphere. He is a pleasure to train and on the field he will have absolutely no problems settling in.
"If things are going well on the field... what happens off it is less important, adapting to a different culture and lifestyle. On the field he will make an immediate impact."
He said Valencia's aim for the new season was to challenge for the top four again after finishing third last season and securing a place in the Champions League group stage.
But he said the Premier League was the best in the world.
"We have a competitive league in Spain but the Premier League, with Manchester United, Chelsea, Arsenal, Liverpool and the others, is the hardest to win. Add Manchester City to that now. They are definite contenders too."
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