China: Jewelry Consumption Registers Double Digit Growth

Jewelry consumption is so big in China, the world’s most populated country, that it’s trailing only housing and car sales. But behind the consumption stands a story of booming jewelry manufacturing.

According to Sun Fengmin, China’s Gem Association Secretary-General, the increased appetite for gold, platinum and diamond jewelry has led to a double digit growth to $12 billon.

One of the leading global manufacturing centers, China’s jewelry makers consume annually 75,000 pounds (34,020 kg) of platinum along with 250 tons of gold, and polish an estimated 3 million carats of diamonds.

The communist country is the leading pearl and jade center, turning out over 500 tons of pearls annually, holding a 90 percent share of the world's output and selling 6,000 tons of jade per year. Moreover, it’s the world’s leading jade consumer market. It has clearly turned away from the traditional centralized economy.

The Chinese economy is booming, and has been growing exponentially since the mid-80s, creating more disposable income, partially used to purchase jewelry. But it did not happen without government help and backing for the local jewelry industry.

It lowered taxes to 10 percent from 15.3 percent three years ago, opened the market to freely trade in silver in 2000, and established the Shanghai diamond exchange that same year, becoming a part of the World Federation of Diamond Bourses a few months ago. Two years ago it opened a gold exchange.

More and more global diamond companies are opening diamond polishing plants in the country, taking advantage of the opportunities. From large companies such as DTC Sightholder Kristall of Smolensk, to medium sized Belgian and Israeli manufacturers seeking to lower costs and find new markets, China’s economy is on the up-swing with much promise yet to be tapped.