Diamond imports to China rose sharply in early 2021.
Between January and June, diamond transactions on the SDE totaled USD3.821 billion, an increase of 86.39 percent over the same period last year.
Net polished imports totaled USD1.576 billion, exceeding the total annual imports for 2020, and were up 49.24 percent from the first half of 2019.
With the present rate of increase, annual diamond imports to China in 2021 are on track to significantly exceed 2019 levels and are extremely likely to surpass the previous record high set in 2018. (USD2.78 billion).
Since the SDE’s inception in 2000, China’s diamond imports have increased at an average annual compound growth rate of 26% up to the historical high point in 2018.
Shanghai Diamond Exchange
Due to the combined effect of pessimistic market attitude and the Covid-19 outbreak in 2019 and 2020, China’s diamond imports fell about 50% over the last two years.
The recent robust rebound indicates that China’s diamond market remains well-positioned to continue growing in the long run as long as the macroeconomy stays stable.
China’s GDP increased by 18.3 percent year on year in the first quarter of 2021. As incomes climbed and the local market matured, the economic engine of China switched away from export and investment and toward consumption.
“The strong rebound in diamond’s imports is due not only to China’s rapid economic recovery, specifically the release of consumption power constrained by the pandemic and the appreciation of the RMB, which offset the increase in diamond prices in USD but also to the Chinese government’s strategic anti-smuggling and anti-money laundering efforts,” Mr. Lin Qiang, said (WFDB.)
“With the support of the country’s policies, the Shanghai Diamond’s Exchange has provided a regulated channel for diamond imports into China and a platform to assist the government in improving oversight, essentially safeguarding the Chinese diamond market’s healthy and sustainable growth over the last two decades.“
In September 2020, Chinese customs authorities launched a statewide crackdown on diamond smuggling, including RMB5.9 billion (USD855 million) in commodities. As a result, the carat weight and quantity of diamonds imported through SDE increased significantly, as it is China’s only gateway for tax-free diamond imports. Between January and June 2021, the SDE increased rough diamond imports by approximately 100% under the normal commerce category. The overall number of SDE members climbed to 382, with 210 of those enterprises being foreign-funded.
In terms of the retail market, China’s diamond consumption has exhibited a trend toward localization, owing to the constraints of international travel. According to Bain’s analysis, China’s retail diamond industry is expected to decline by 6% in 2020 but has recovered more rapidly than other markets.
China’s diamond retail market expanded by 15% to 20% in the fourth quarter of 2020, compared to the same period in 2019. Between January and May 2021, China’s jewelry retail market reached RMB128.3 billion, an increase of 68.4 percent year on year over 2019, according to China Statistics Bureau data.
Since the beginning of 2021, the wedding market, which was severely impacted by the pandemic, has made a rapid recovery.
In the first quarter of 2020, almost 2.1 million new couples applied for marriage certificates, a 37 percent increase over the same period in 2019.
