China main driver of the world's diamond consumption

David Kellie, CEO of the Natural Diamond Council (NDC), a global trade group, sees China continuing to drive the world’s diamond consumption on the back of its strong economic growth despite the impact of the Covid-19 pandemic. Other factors that will stoke diamond consumption are China’s rising middle-income shoppers and the emotionally more expressive younger generation of consumers who give gifts and like to treat themselves well, without being indulgent or crass, the China Daily reports. The country’s GDP growth of 12.7% in the first half of this year “formed a solid foundation for growth” for the diamond industry, said NDC CEO Kellie. He forecast the diamond market to exhibit an optimistic V-shape recovery, meaning the global diamond jewelry sector is expected to reach the pre-pandemic level of 2019 in 2022 to 2023.

As the world’s second-largest diamond market after the United States, China’s branded jewelry accounted for 15% of the entire market, reaching USD100 billion in value. Kellie identified the super large size of the middle-income group in China, and the Covid-related cross-border travel restrictions as critical drivers of the growth in diamond consumption in the Chinese market. The NDC plans to team up with local jewelry brand Chow Tai Fook to launch educational programs on natural diamonds. “We would like to leverage Chow Tai Fook’s network of over 4,000 points of sale to reach a much wider consumer community even more quickly and deeply through our rich and enlightening content,” Kellie said. “We are hoping that our collaboration with Chow Tai Fook will contribute to further market growth.”

The transaction value at the Shanghai Diamond Exchange (SDE) reached USD3.82 billion in the first six months of this year, up more than 86% from the pre-pandemic level in the same period of 2019. Imports of net polished diamonds during the same period reached USD1.58 billion, exceeding the import level of 2020, and up 49% from the first half of 2019. The Exchange predicted China’s diamond imports this year will surpass the previous record of USD2.78 billion in 2018. Lin Qiang, President of the SDE, attributed the strong rebound in diamond imports to “the quick recovery of China’s economy, specifically the release of consumption power and the appreciation of the yuan, which offset the increase in diamond prices in U.S. dollar terms”. Another reason for the rebound in diamond consumption in China is the expanding Generation Z population who ascribe different values to diamonds and use more digital platforms to understand the products they buy, the China Daily reports.