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China as factory to world mulls the unthinkable: Price hikes

Employees make suits at a factory operated by the Shandong Ruyi Technology Group in Jining, China, on May 30, 2016. Photo: Qilai Shen/Bloomberg

China's factories may be on the cusp of delivering a new shock to the global economy after years of undercutting rivals with cheaper costs. This time, increases in prices could reverberate around the world.

To understand why, consider the dilemma facing Jiangmen Luck Tissue Mfy Ltd., now caught in a squeeze between surging wages and tepid demand. The company has already slashed staff by half, shaved prices and automated production to survive. Now, with margins razor thin, it's weighing the first price increases since 2010...

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