While at home time a large percentage of diamond jewelry was set and made in Russia that has definitely changed over the last few years. Few people are aware of it but today much of the diamond jewelry produced is actually set in China. Recently, China has become one of the leading outsourcing nations in the world. Less expensive labor prices and improved cost benefits have primarily led this trend. Jewelers who are working with issues of mass production find these benefits to be highly advantageous.
In addition, China has made it possible to cater to other markets beyond the United States, including Asia and Europe. The fact that diamond trading has been promoted on a large basis in China has also led to much of the development of the industry in this corner of the world. The fact that the local taxes in China are not as high as in other areas has also certainly contributed to the shift of Chinese diamond setting. For example, in India where diamond setting has always been quite prevalent, approximately 50% of all business went to taxes. Conversely, in China tax levels are much lower. Additionally, the Chinese government has also offered a sort of ‘tax holiday’ that has greatly benefited many in the business.
In 2006, the tariff on diamonds in China was reduced as an incentive by the Chinese government to promote an industry which was already growing by leaps and bounds.
The quality of the diamond jewelry produced in China is exceptional. So much so that many jewelers have begun to have all of their diamond pieces produced in China.
The international jewelry market has also found a home in Hong Kong; where jewelers from around the world meet to trade and stay abreast of the diamond jewelry market. Today a large number of the world’s diamonds are actually traded in Hong Kong. This represents a large amount of growth from just a few years ago.
The shift of the diamond industry to China has become so pronounced that many feel that China has become one of the most promising countries in the worldwide diamond industry in regards to both manufacturing as well as consumption.
It is widely expected that China will become one of the leading diamond manufacturing centers in the very near future due to the cheaper labor costs as well as the high degree of skilled offered by Chinese workers. It is estimated that more than 20,000 Chinese workers manufacture an average of 3 million karats worth of diamonds each and every year. Compared to the rest of the world, this makes China the second largest diamond manufacturing site in the world; coming in second only to India. The continuing high tax rate in India and the low tax rate in China could indicate even more of an increase to the Chinese market in the coming years.
In the last few years several dozen foreign companies, primarily privately owned, have established both jewelry manufacturing operations as well as diamond polishing operations in China. An estimated $800 million worth of rough diamonds are imported in China each year. After being polished, those diamonds attain an estimated value of $1.1 billion. Many around the world have noted that this rapid pace of growth in China may be virtually impossible to stop.
Currently, Shanghai is only the fourth city in the entire world with the ability to lay claim to both a manufacturing base as well as a diamond bourse. The other three cities include Antwerp, Bangkok and Israel.
According to reports released by the Diamond Administration of China, based in Shanghai, the total number of exports as well as imports of diamonds reached $610 million on the Shanghai Diamond Exchange in 2006. That was an increase of 44% from the previous year.
The large increase in Chinese trade has certainly caught the world’s attention. Not only has China become a center for manufacturing but also has demonstrated a large consumer market as well. Traditionally, diamonds were not presented to Chinese brides; however, in the last few years this has changed and more Chinese weddings are incorporating diamond jewelry. Additionally, Chinese consumers are purchasing a large number of luxury products, with diamond jewelry ranking at the top of the list.
The Israeli Diamond Industry is just one entity which has taken notice of the increased diamond trade in China. Recently, they have begun to participate in trade shows in China as well as in Hong Kong. Plans have also been made to establish an IDI office in Hong Kong in direct response to the Chinese diamond market.
Given the increasing consumer interest in the diamond industry in China and the fact that many jewelers are turning to China for manufacturing of rough diamonds, it certainly seems as though the future of the diamond industry is quite bright indeed.
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