The negative impact of rising wages is being felt by China's more than more than 10 million small businesses, which account for 60% of the economy and 80% of jobs, reports the Wall Street Journal.
Small business owners interiewed by the Journal reveal they have to raise prices to cope with the yearly rise in salaries. Big multinational companies operating in China have already been rattled by rising wages.
Small businesses also worry about the appreciation of the yuan. "If the currency appreciates 5% or 10% then we wouldn't be able to do this business anymore," Cindy Wu, sales manager of Da Wei Zipper Co., told the Journal.