Presentation about the diamond industry in China written by Ehud laniado. China, among the most ancient nations on earth, has one of the oldest jewelry industries in the world. However it is a relative newcomer to diamonds and the diamond industry as a center. China has it all: a growing consumer population with a growing appetite for all diamond related aspects - jewelry, diamond and jewelry manufacturing, loose diamond trading, a diamond exchange, and even diamond mining. In short, China is a fully integrated diamond country. Read more here: http://www.ehudlaniado.com/home/index.php/news/entry/the-awakening-of-diamonds-in-china

1. By Ehud Arye Laniado
www.ehudlaniado.com
The Awakening of Diamonds
in China

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Presentation by Ehud Arye Laniado
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China, among the most ancient nations on earth,
has one of the oldest jewelry industries in the
world. However it is a relative newcomer to
diamonds and the diamond industry as a center.
A link to the full article can be found on the
last slide of the presentation
September 2015
The views expressed here are solely those of the author in his private capacity. None of the information made
available here shall constitute in any manner an offer or invitation or promotion to buy or to sell diamonds. No one
should act upon any opinion or information in this website (including with respect to diamonds values) without
consulting a professional qualified adviser.

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The Awakening of Diamonds in China
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• China has it all: a growing consumer population with a
growing appetite for all diamond related aspects, it has
jewelry, diamond and jewelry manufacturing, loose diamond
trading, a diamond exchange, and even diamond mining. In
short, China is a fully integrated diamond country.
• Historically, China’s jewelry trade was limited to gold and
jade. Even now, gold is often purchased as a store of value,
and not necessarily as an adornment. As such, jewelry
design is not always important. The purchase and gifting of
jades, on the other hand, combine both beauty and sound
economic thought.
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China and diamonds
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• Its first diamond manufacturing facilities were established in the
1980s. They were mostly operations that relocated from Hong
Kong to China in order to harness the lower labor costs.
• By the 1990s, as China continued to open up, more and more
diamond factories established polishing facilities in developing
industrial regions. The product range slowly expanded and the
quality of workmanship improved. Concurrently, the Chinese
government offered financial benefits and incentives to attract more
diamond and jewelry factories.
• During this period, the Chinese economy experienced a great
expansion and, combined with the easing of property ownership and
rising incomes, more and more people accumulated personal
wealth.
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Consumer Market
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• De Beers launched major marketing campaigns for generic
diamonds in 1993, using the ‘a diamond is forever’ slogan.
• The ongoing campaign proved exceptionally successful,
promoting diamond jewelry wedding gift to a ‘must have’ status.
Prior to the campaign, diamond engagement and wedding rings
were not part of the Chinese tradition.
• In the following decade, wedding rings proved to be an important
driver of the Chinese diamond market. In 2000, China’s total
jewelry market was estimated at $9.2 billion. In 2005, Chinese
government statistics suggest that demand for diamond jewelry
reached roughly $1.1 billion. During this period, overall jewelry
consumption increased at an estimated annual rate of 10%-15%.
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• In terms of diamond consumption, China was the world’s third
largest market in 2008, with an 8% global market share following
the US and Japan. A year later, it was already the world’s second
largest diamond consumer market, with an estimated diamond
jewelry retail sales of $1.2-$1.3 billion, according to official
figures.
• In 2009, imports through Shanghai Diamond Exchange
increased by 16.4%, reaching over $1.5 billion and China’s
overall jewelry sales for 2010 were estimated at over $21 billion.
• At this point, diamond wedding rings were already a well-
established practice, comprising an estimated 50% of total
jewelry sales.
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Manufacturing
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• Upon recognizing the need for organizing diamond trade,
the Shanghai Diamond Exchange (SDE) was established in
2000, serving as the only channel for importing and exporting
diamonds in China.
• The SDE consisted of only 41 members at launch and, in 2014,
this figure increased to 364, 248 of which are foreign firms from
India, Israel, Belgium, South Africa, U.S., Japan, Hong Kong
and Taiwan.
• China is the world’s second largest diamond polishing industry.
According to Bain, China surpassed India in jewelry production
in 2011. Total jewelry production reached $127 billion in 2012,
$47 billion of which was related to diamond jewelry.
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• The majority of China’s jewelry and diamond manufacturing takes
place in Shenzhen.
• Panyu, an area in Guangzhou, is home to several hundred jewelry
and diamond manufacturing facilities.
• These facilities currently polish the full range of goods, from the
smallest sizes to five-carat items. In many places, they provide
excellent polished goods. Although locally polished goods serve the
global market, these facilities focus on goods sold to the local
market. They include 0.30-2 carats, G-J color in VS-VVS qualities.
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Mining
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• China has a small diamond mining industry. Most of the mines are
located in Shandong Province. Most notable is the 701 Changma
Diamond Mine, which produced over 1 million carats to date. The
annual production capacity was estimated at 50,000 carats, but
China’s total production has fallen below that level, according to
Kimberley Process figures.
• In 2014, China imported diamonds valued at $5billion , a 30%
year-on-year increase. Rough diamond imports amounted to $3
billion, up 9% from 2013.
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India, where it all began
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The views expressed here are solely those of the author in his private capacity. None of the information made
available here shall constitute in any manner an offer or invitation or promotion to buy or to sell diamonds. No one
should act upon any opinion or information in this website (including with respect to diamonds values) without
consulting a professional qualified adviser.
September 2015
A full version of the article can be found here:
http://www.ehudlaniado.com/home/index.php/news/entry/the-awakening-of-diamonds-in-
china