The article doesn't clearly explain why the shift has happened. It does point out:
> ... China ... wants to stimulate domestic garbage collection and end the flow of foreign trash it sees as an environmental and health hazard.
And later:
> China accepted dirty and mixed recyclables because it had low-wage workers to sort out unwanted material, often by hand. That gave American contractors little incentive to weed out food scraps, plastic bags and nonrecyclable junk stateside.
Have wages in China really risen so quickly that human garbage sorters are now too expensive? That seems unlikely, and the article gives no evidence for it.
An alternative explanation might be that the plastic was never recycled in the first place. It's more than just sorting. Each container has a residue of liquid/solid stuff that can't possibly be compatible with low-cost material recycling.
What if the material received by China was actually burned instead to generate energy rather than new containers? That might explain the newfound reluctance of China to take the stuff.