RAPAPORT… China’s diamond imports surged last year as domestic jewelry demand strengthened amid a post-lockdown economic recovery, according to the country’s major trading hub.
The total value of polished goods shipped through the Shanghai Diamond Exchange (SDE) jumped 105% to a record $2.92 billion, a spokesperson for the bourse said Monday. Volume rose 96% to 2.8 million carats.
“The historic growth in diamond imports in 2021 proves that the economic fundamentals and underlying factors supporting the long-term development of China’s diamond market remain unchanged, and indicates that China’s diamond imports shall sustain waves of growth for a long time to come,” commented SDE president Lin Qiang.
The figures also exceeded 2019, rising 58% by value and 64% by volume. This reflects the total diamond imports entering China for domestic sale, as the SDE is the only channel for shipping polished at favorable rates of 0% tariffs and 4% value-added tax, the spokesperson explained.
Spending in China has roared back since the country’s Covid-19 crisis of early 2020, when store closures sapped demand. Consumption has become more domestic because of travel bans, with the region’s largest jewelry retailers reporting sharp increases in 2021 compared with 2020 and 2019.
Retail sales of gold, silver and jewelry leaped 30% in 2021 to CNY 304.1 billion ($47.88 billion), according to the National Bureau of Statistics of China. Gross domestic product (GDP) increased 8.1% for the year in line with higher income levels and a shift toward a consumption-based economy, the SDE noted.
However, diamond dealers reported sluggish sales during the 2022 Chinese New Year season compared with last year as consumer sentiment showed signs of waning. Economic growth slowed to 4% in the fourth quarter of 2021 — a trend analysts have put down to power shortages, a real-estate crisis, and measures to contain fresh coronavirus outbreaks.
Image: Crowds in Wuhan, China, October 2020. (Shutterstock)
China’s Polished Market Sees Record Imports
The Bottom Line
- Polished diamond imports through the Shanghai Diamond Exchange surged 105% in value and 96% in volume in 2021, reaching $2.92 billion and 2.8 million carats.
- Imports exceeded 2019 levels by 58% in value and 64% in volume, supported by favorable tariff and tax rates via the SDE channel.
- Despite strong 2021 growth, diamond sales slowed during the 2022 Chinese New Year amid economic headwinds including power shortages and real-estate challenges.
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