China – Hungry for Diamonds

PostBy Avi Paz Group At 31.10.2010

Diamonds have not historically been a major part of China's millennia-old jewelry tradition, which has put a greater emphasis on jade and pearls, but in recent years the country is making up for lost time. In 2010, China – with its population of 1 billion – became the world's second-largest consumer of diamonds after the US, displacing Japan. 

According to De Beers, demand for diamonds in China is projected to increase 16% by 2016, an even sharper rise than India. Moreover, De Beers says, China and India are soon expected to eclipse the US as consumers of gem-quality diamonds from Botswana. 

In 2009, China's People's Daily newspaper put the total value of the country's polished imports at $699 million, a number that is only expected to grow in the coming years. 

Australia's Rio Tinto company recently entered into a supply agreement with one of China's biggest diamond jewelry retailers, and the company's retail arm has produced a number of specialty items for the Chinese market. 

Recognizing the importance of the Chinese market, in 2010 a number of Antwerp diamond companies took part for the first time in the China International Jewellery Fair in Beijing. The Antwerp pavilion was organized by the Antwerp World Diamond Centre, whose CEO said   that the international diamond industry understood that China was on the cusp of becoming one of the biggest markets for diamonds in the world and that its economic progress had created a "growing demand for diamond jewelry."

China is also making strides as a manufacturer and exporter of diamonds. Former De Beers CEO Gareth Penny, speaking at a 2010 conference in Mumbai, said that in 2009 China had accounted for 6% of the world's diamond exports, but that its share could increase to as much as 11% by 2016.