Diamond analyst Paul Zimnisky explores why China’s once-booming diamond and jewellery market has yet to stage a solid comeback. Weighed down by economic challenges and shifting consumer sentiment, demand has fallen sharply since 2024. While luxury brands remain invested and early signs of stabilisation are appearing, Zimnisky notes that a clear recovery is still out of sight in this vital global market.
China, which has been the world’s largest, fast-growing luxury consumer for much of the last two decades has noticeably waned in the post-pandemic period. Factors impacting the market ostensibly include an aging demographic, an over-leveraged economy, a precarious residential real estate investment market and a “middle-income trap” that have pressured the larger economy and ultimately the consumer.
For diamonds specifically, Greater China was estimated to represent as much as 15-20% of global diamond jewellery consumption as recently as a few years ago, however after a precipitous drop in 2024 the market has been halved, according to Paul Zimnisky data and analysis.
Diamond consumption in the region has been impacted by the aforementioned macro factors but also, perhaps more concerningly, a loss of consumer confidence in the perception of diamonds as a store of value. Many astute Chinese consumers are aware of falling diamond prices over the last two years, especially as gold prices have surged to record levels – a narrative that has been shared on social media by younger consumers (see below chart).
This said, the Chinese market is way too large to surrender. The nation hosts the world’s fastest growing middle-class fed from a population of well in excess of a billion people –China is also home to 6 million millionaires (in USD), second only to the U.S.’s 23 million.
The CEO of LVMH, Bernard Arnault, recently predicted that the Chinese luxury market will return to “normal” levels by the end of 2027. LVMH, which rivals Hermès for the largest luxury company in the world, is still investing in China. The company opened a new flagship Tiffany & Co. store in Chengdu in March as well as a new namesake Louis Vuitton flagship in Shanghai in recent weeks. The latter is a novel cruise ship-shaped store which was built to emphasise interactive customer experiences.
Johann Rupert, the Chairman of Richemont, which owns Cartier and Van Cleef & Arpels, said in May that he “fully believe(s) that China will recover.” Rupert, has noted a confidence crisis as a predominate factor in the market’s slowdown, however, he reiterates that “China is unstoppable.”
Year-to-date 2025, a well-defined recovery in Chinese diamond and jewellery remains to be seen—if anything, the situation has been further complicated by the ongoing and volatile trade spat between the U.S. and China.
However, according to diamond manufacturer and wholesaler anecdotes, there have been some recent green shoots noted, albeit modest, in certain categories such as smaller, higher-quality melee goods. Encouragingly, this has coincided with industry reports of activity in the C-to-B market considerably slowing – i.e. consumers selling diamonds back to the trade, which reached usually high levels last year.
Higher-quality one- to three-quarter-carat goods have been the mainstay for the Chinese market over the last two decades, but demand for these items still remains softer than desired according to Paul Zimnisky contacts. A discernible return in demand for these goods would likely indicate a broader recovery.
In March, Ajesh Mehta, Convener of the Diamond Panel Committee, at the GJEPC said the Chinese consumer has “effectively pressed a reset button,” noting that he expects “confidence will likely return for larger stones, such as 30 or 50 points” eventually.
Paul Zimnisky, CFA is an independent diamond industry analyst and consultant based in the New York metro area. For regular in-depth analysis and forecasts of the diamond industry please consider subscribing to his State of the Diamond Market, a leading monthly industry report; an index of previous editions can be found here. Also, listen to the Paul Zimnisky Diamond Analytics Podcast on Spotify or Apple Podcasts for exclusive full-length conversations with special guests from the gem and jewelry industry. Paul is a graduate of the University of Maryland’s Robert H. Smith School of Business with a B.S. in finance and he is a CFA charterholder. He can be followed on X @paulzimnisky and on YouTube @paulzimnisky.
Paul will be giving a keynote presentation at the DMCC Lab Grown Diamond Symposium in Dubai, UAE on September 30, 2025.
Disclosure: At the time of writing Paul Zimnisky held a long equity position in Brilliant Earth Group and Newmont Corp. Paul is an independent board member of Lipari Mining Ltd, a publicly-traded Canadian company with an operating diamond mine in Brazil and a development-stage asset in Angola. None of the above constitutes investment advice, please read full disclosure at www.paulzimnisky.com
