Diamond, Jewelry Giants Eye China Growth

American diamond company Galace is the latest international firm to open a store in Beijing as the global luxury goods industry looks to cash in on China’s massive potential and powerful economic growth.

Galace joins French jeweler and watchmaker Cartier in China, while De Beers LV is also planning to open a store in Beijing.

China was seen as the fifth largest consumer of diamond jewelry last year, consuming $1.235 billion of goods. For many international diamond jewelry firms, however, that is just the starting point given that demand in the Chinese market for diamonds is growing exponentially with Shanghai and Beijing forecast to become cities with heavy diamond consumption.

Many industry experts predict that by 2010, Shanghai will become a large trading center in the world's diamond manufacturing and trading field, with diamond and jewelry sales of $3 billion-$5 billion, and the number of people employed in the local industry rising to 100,000.

Among the factors pointing to a huge growth in diamond jewelry sales are that half of women in China's large cities and 80 percent of brides in Shanghai and Beijing celebrate their weddings with diamonds.

Once brides in rural areas catch on to the trend, the potential for growth is seen as enormous in a country with a population of around 1.3 billion people. 

On top of local demand, an important boost comes from the country’s international pledges. Under commitments made by China to gain entry to the World Trade Organization, the country is committed to opening up its diamond retail market after 2005.