China Jewelry Sales Seen Doubling Within 10 Years

Chinese jewelry sales are forecast to double to 200 billion yuan ($24 billion) within 10 years, according to industry experts in China.

Jewelry sales have rocketed to 100 billion yuan from 100 million yuan in the past two decades as the country has opened up to Western styles and fashions and further strong rises are expected.

China is the third largest consumer in the world of gold and Asia’s largest market for diamonds following a takeoff in sales of diamond ornaments.

Although the Chinese jewelry business has a long history, it was only in 1982 that the market began developing.

The market was almost entirely dominated by gold ornament sales from 1982 to 1991, after which jewelry featuring diamonds, jade, pearls and other precious stones gained increasing popularity.

Following the signing of the Close Economic Partnership Arrangement between Mainland China and Hong Kong and Macau, tax on jewelry has been cut to zero from a previous level of 35 percent if products meet the mainland’s customs requirements.

This policy change enables jewelry from Hong Kong and Macau, long exposed to Western influences, to more easily enter the mainland.

A delegation from the World Federation of Diamond Bourses (WFDB) visited China last November as the Shanghai Diamond Exchange marked its third anniversary. The WFDB general assembly is expected to vote in the exchange as a member when it meets at the World Diamond Congress in New York in May.

The WFDB deputation discussed the removal of China’s trade barriers, which hold back the growth of the Chinese industry. Although China’s tax and customs administration has become considerably more favorable to the diamond trade, further major steps are still needed.

“Procedures involving the VAT charged on platinum imports were relaxed last year,” said Shmuel Schnitzer, WFDB President, who led the delegation to China.

“The implementation of similar procedures for diamonds would encourage the import of diamonds into the country, and help meet the increasing demand for polished goods in the local marketplace.”