Golden Week Buoys Market

RAPAPORT… We made the highest sales record during the seven-day Golden Week,” said Pan Bin, general manager of Lao Feng Xiang International Trade Co., Ltd., a subsidiary of the Lao Feng Xiang Group, one of the oldest local jewelers, established in 1846. “Sales of all categories of jewelry in the Shanghai market by our affiliated jewelry shops topped $5.06 million during the holidays. Among those sales, $1.52 million came from diamond jewelry sales. It was a better performance than that of the Chinese New Year at the end of January, which was the best-selling season in the first half of the year.”

Dong Liu Fu, director of Shanghai Kimberlite Diamond Co., Ltd., which has more than 500 affiliated and franchised jewelry outlets in the country, told RDR that the company’s retail sales during the October holidays increased by some 30 percent over the same period in 2005.

Guo Wei, office manager of the Dalumi Shanghai Co., Ltd., also described his company’s preholiday sales as satisfactory. He said that demand was more than 30 percent greater than last year, especially in the 30- to 50-point categories and larger sizes.

Dalumi has two selling offices in Shanghai and Shenzhen and one jewelry factory in Shenzhen. “In light of the new preferential tax policy,” said Guo, “we plan to explore the Chinese market with customer-tailored marketing support for our clients. For example, Dalumi’s jewelry factory will create new designs for fancy cut goods and for low-color goods in order to help our downstream jewelry clients distinguish themselves in the marketplace.”

According to some jewelers from Shanghai and Beijing, wedding jewelry was the major item for the holiday sales. Another reason for the buoyant sales is that one of the most important traditions — the Mid-Autumn or Moon Festival — fell on the last day of Golden Week, which generated a gift-purchasing boom.

The range of goods in demand has broadened recently. Besides so-called “China goods,” i.e., 10-per-carat to 3-per-carat, VS to VVS, H to J, demand has increased for 50 to 80 points of very good make or excellent make. Also, 5 to 25 points, I to K, SI to piqué 1 goods are gradually becoming acceptable.

Overall Economic Climate in China

One of the highlights of the government’s current five-year economic plan is to encourage consumption so that economic growth is less dependent on exports and investments. Measures have been adopted to promote this goal, including efforts to generate holiday consumption. According to the Ministry of Commerce, consumers bought about $38 billion worth of goods during the holiday, up by 14.5 percent from 2005.

China’s gross domestic product (GDP) is expected to grow by 10.5 percent in 2006 and by 9.5 percent in 2007, the Shanghai Securities News reported, citing statements from the State Information Center’s economic forecasting department. Inflation remained moderate, with the Consumer Price Index (CPI) rising only 1.3 percent in the first three quarters of this year, according to the National Bureau of Statistics. Some economists believe that fast development with low inflation is most ideal for the economy since less concern about inflation will reduce the threat of further tightening by the central bank and that will boost consumers’ as well as investors’ confidence.

A recent survey conducted by the U.S.-based Michigan Consulting Group reported that the Consumer Confidence Index in China scored at 106.9, while, in the United States, it was 82.0. The survey questioned 3,000 Chinese families selected from 29 provinces, autonomous regions and municipalities. According to the findings, consumers from Shanghai, Changsha, Shenzhen, Hohhot, Xiamen and Qingdao are the most confident among the surveyed cities.

A 101.46-carat Rough Diamond Found in Shandong

The China Materials Corporation announced on October 10 that a gem-quality rough diamond weighing 101.46 carats had been found in its subsidiary No.701 mine in the Mengyin area in Shandong province. The long, octahedral-shaped rough is the fourth-largest rough diamond ever found in China and the second largest from the 701 mine.

The Marketplace

• The majority of goods selling in the market:
10-per-carat, good make, VS+/H-I, are selling at approximately $620 to $660.
6-per-carat, good make, VS+/H-I, are selling at approximately $830 to $870.
4-per-carat, good make, VS+/H-I, are selling at approximately $1,040 to $1,080.
3-per-carat, good make, VS+/H-I, are selling at approximately $1,400 to $1,500.
• The market also accepts:
10-per-carat, good make, VS+/I-J, are selling at approximately $600 to $630.
6-per-carat, good make, VS+/I-J, are selling at approximately $780 to $830. 4-per-carat, good make, VS+/I-J, are selling at approximately $900 to $950. 3-per-carat, good make, VS+/I-J, are selling at approximately $1,250 to $1,350.
• 1/10 to 1/6, TTLB, SI and piqué 1 are also moving.
• Demand is increasing for 50 to 80 points, VS1-VVS/G-I, very good or excellent make.