CHINA's role as a supplier for cheap goods will come to an end soon, says Li & Fung chairman William Fung, whose Hong Kong's company supplies the world's major retailers.
Due to rising domestic consumption and higher wages, this will have an unsettling effect on Western retailers, Mr Fung told the recent World Retail Congress in Paris.
"When China starts consuming and with India right behind, I predict a round of price increases and margin squeezes," Mr Fung said.
Over the next 30 years, China and India could add more than one billion customers - both "an opportunity and a threat" for the retail industry, he said, Reuters reported.
"China will disrupt the world," he said, adding that China operates in 30-year economic cycles. Between 1979 and 2009, it had been the world's "factory" producing goods at low prices based on low wages.
"For 30 years, China kept consumer prices low and people like us enjoyed very good margins," Mr Fung said.
But since 2009, he sees China making a structural changes by boosting economic growth through greater domestic consumption while wages have risen.