Abstract Gems & Gemology, Summer 2013, Vol. 49, No. 2

China Market: The New Frontier

China, the world’s second-largest jewelry consumer after the United States, is also the second-largest jewelry manufacturing center after India. There is enormous potential for diamond jewelry in China, where the government has supported the industry through major policy decisions: reducing the VAT (value-added tax) on diamonds, abolishing import duties, and setting up the Shanghai Diamonds Exchange for trading in rough and polished diamonds. The government has signed multibillion dollar resources-for-infrastructure deals with various African governments, securing its supply of rough diamonds. These efforts have drawn a huge flow of capital investment from diamond companies in Tel Aviv and Antwerp. Skilled diamond craftspeople have been brought in from Surat, India, to train Chinese workers.

Overall, China has cheaper labor costs than India, and its workforce provides better finishing of jewelry. Much of the work in Chinese jewelry factories is automated, and the level of technology and infrastructure is higher than in India. India produces every size and type of rough, while China mostly manufactures sawables. While India holds the advantage in manufacturing, China is a major consumer of polished diamonds. China is also better at jewelry manufacturing. But there is no original Chinese brand of international jewelry, and country needs better communication with the outside world.

Abstracted by Guy Lalous