Since the beginning of 2021, the diamond trading volume via the Shanghai Diamond Exchange (SDE) has witnessed a strong rebound, as the country effectively contained the Covid-19 pandemic, the SDE said in a release.
The net import of polished diamonds through the SDE in 2021 reached another record high, reflecting the potential and resilience of the Chinese diamond market, the SDE informed.
According to the data from the SDE, the total value of diamond transactions via the SDE in 2021 reached $7.076 billion, increasing 81.3% year-on-year, and up 67.1% from 2019. The diamond transaction value records the total rough and polished shipments in and out of the SDE, and reflects how active the trading activities are.
For the full year 2021, the total weight of net polished diamond import via the SDE reached 2,787,000 carats, growing 95.5% year-on-year, and up 63.7% from 2019. Total net polished diamond imports reached a new record high of $2.924 billion, surging 105.3% versus 2020, and up 58% from 2019. The SDE is the only portal in China to import polished diamonds under the favourable tax policy of 0% tariff and 4% Value Added Tax (VAT), therefore the figure reflects the value of polished diamonds imported for consumption in China.
From 2002 to 2021, net import of polished diamonds via the SDE has grown from $31 million to $2.924 billion, with a total increase of 94 times and an average compound annual growth rate (CAGR) of 27%.
“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,” concluded Lin Qiang, Vice Chairman of the World Federation of Diamond Bourses (WFDB) and President of the Shanghai Diamond Exchange (SDE).
China’s Gross Domestic Product (GDP) in 2021 increased 8.1% year-on-year. With the rising income levels and a maturing domestic market, China’s economic growth has gradually transitioned from its previous export and investment-oriented model to a consumption-oriented one. In 2021, the contribution of consumption spending accounted for 65.4% of the economic growth, driving the GDP growth by 5.3 percentage points, indicating that consumption has become the main force of the steady recovery of the nation’s economy.
According to data released by the National Bureau of Statistics of China, the annual retail sales of gold, silver and jewellery products for the key sampling jewellers grew by 29.8% year-on-year in 2021, ranking first among the consumer retail market segments. Historically, the high-end consumer market for diamonds and jewellery has the tendency to grow along with a country’s sustained economic growth and social affluence. According to statistics from the Gems & Jewelry Trade Association of China (GAC), China’s diamond jewellery market reached approximately $12.4 billion in 2021, accounting for 13% of the nation’s jewellery market. In comparison, the average share of diamond jewellery in the global jewellery market is 26%.
Although China is the second largest consumption diamond market in the world, the share of diamonds in the overall jewellery market is still significantly lower than the global average, SDE said. With the Chinese economy projected to grow at an average annual rate of 5 to 6% in the next coming years, its diamond consumption market is poised for the next booming decade.