The Chelsea coach has advised the teams to pay great attention to Pep Guardiola's revolution at the Etihad which saw them spend over £200m during the summer transfer window this year.
City are currently leading the league with 11 points between them and Manchester United in second place. They are unbeaten in their 18 games thus far this campaign and are currently on a 16-game winning run.
Guardiola spent over £100m strengthening his defence in the summer and is now looking at adding more reinforcements with Southampton's Virgil van Dijk the Spanish coach's latest target.
According to reports, the Citizens are plotting a £60m-plus move to bring him to the Etihad Stadium in January and Conte believes that if the spending continues, City will become untouchable not only in England but also in Europe.
Despite warning other clubs about the league leaders' financial might, the Blues boss admits that a team's ability to spend big amounts should be respected, as he believes that there is nothing wrong in spending money to strengthen the squad.
"Every team, every club, must pay great attention," Conte said, as quoted by Goal. "Because if a club like Manchester City takes all the best players, it will be very difficult for us to fight. Not only in England but in Europe."
"If they can do this, it is right for them to do this. We must pay great respect. When you have this opportunity to go in the market to spend a lot of money, I think it is right to do this.
"You must obviously be very good to spend your money in this way — sometimes you can spend a lot of money in a bad way," he explained. "You must be clever to understand the positions, the roles you have to improve. In this case you must be very good."
Apart from City, Premier League rivals Liverpool, Chelsea and Arsenal have all been linked with moves for Van Dijk. The Reds were leading the race in the summer but were forced to issue an apology after the Saints accused them of tapping up the defender.
The Reds have since said to have ended their interest after baulking at Southampton's £70m valuation leaving Guardiola's side with limited competition for the defender's signature.