Chinese diamond demand puts gleam back into gem trade
By James Pomfret
SHENZHEN, China (Reuters Life!) - Diamonds may have lost their luster for many in the economic downturn, but China's legions of wealthy, status-conscious customers are helping the precious gem trade glow again.
Imports of polished diamonds to the U.S., the world's biggest diamond market, roughly halved in the first six months of the year but China's grew nearly 13 percent to $300 million, helping buttress the global diamond trade at a critical time.
"China can't save the global diamond industry, but at the least it can slow its decline and give it support," said Frank Wu, head of TTF studio which crafts jewelry for top global and Chinese brands.
Rows of Chinese artisans, hunched beside green lamps, peer into microscopes and set glittering gems onto rings and pendants at Wu's diamond workshops in southern China.
"We're still unable to fulfill our orders. Our manufacturing lines are working overtime," he said, adding that he plans to nearly double his workforce next year.
While part of Wu's finely wrought wares are exported, the pickup in business is also driven by China's surprisingly robust and growing domestic demand for diamonds, that has bucked a severe slump in global luxury sales which are expected to decline 8 percent this year, according to U.S. consultancy Bain & Co.
China's increasingly affluent middle class and vast pool of customers are seen as key factors, with nearly 6 million couples expected to marry this year and splash out on diamond rings.
"Even in the crisis you still see growth (in China), people are still making money ... it looks like it will be a good season," said Tsvi Pluczenik, the CEO of diamond group Pluczenik, at a leading diamond fair in Hong Kong last month. Continued...