China’s Q1-Q3 Polished Diamond Imports Triple; Expected To Reach $3 Billion In 2021

With the rapid recovery of China’s retail jewellery market, the diamond imports of the country have maintained a sustained growth momentum in the first three quarters of 2021. According to the data from Shanghai Diamond Exchange (SDE), the diamond transactions in the SDE from January through September 2021 reached $5.718 billion, representing an 81.2% increase over the same period of 2019, and approaching the all-time high of $5.784 billion in the whole of 2018. 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.

Chinese Polished Diamond Net Import via SDE (US$100 Million)

Source: SDE

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). Net import of polished diamonds through the SDE from January through September, which reflects the value of polished diamonds imported for consumption in China, reached $2.316 billion, up 206.3% year on year of 2020, and up 59.3% compared to 2019. This figure has well exceeded the full-year amount of 2019 and 2020 (respectively $1.851 billion and $1.424 billion). With the current growth momentum, the annual net polished import in 2021 is projected to approach $3 billion to set a new record high since the SDE was founded in 2000, exceeding the existing milestone of $2.74 billion in 2018.

Net polished import in the month of September reached $ 239.9 million, up 14.6% year on year of 2020 and up 83.1% of 2019.

Import of rough diamonds under normal trade category from January through September reached $49.962 million, posting an increase of 123.7% compared to the same period in 2019.

The growth of diamond import reflected the pace of rapid recovery of China’s jewellery market. From January through August 2021, China’s jewellery retail of the key sampling jewellers registered a 45% increase year-on-year over 2020, which ranked top among all the retail categories in terms of growth rate, according to the data by the National Bureau of Statistics of China.

Lin Qiang, Vice Chairman of the World Federation of Diamond Bourses (WFDB) and President of the SDE, concluded, “The Mid-Autumn Festival and National Day Golden Week holidays are traditional sales seasons. Meanwhile, due to the impact of the pandemic on international travel, a large part of overseas jewellery consumption by Chinese tourists has shifted back to domestic market. Furthermore, the Chinese government has been strengthening its anti-smuggling and anti-money laundering efforts this year, which has played a positive role in promoting the entry of diamonds into the Chinese market through the legal import channel of SDE. I believe this year’s diamond imports through the Shanghai Diamond Exchange are more reflective of the actual demand in the Chinese diamond market.”

According to statistics from the Gems & Jewelry Trade Association of China (GAC), the diamond jewellery retail accounts for approximately 13% of China’s RMB 600 billion ($92.74 billion) jewellery retail market.

The overall recovery of the jewellery market in 2021 has driven the development of the diamond market, however, the wedding market, backbone of diamond consumption, still needs further recovery. In the first half of 2021, 4.166 million couples registered for marriage in China, posting an increase of 287,000 couples compared to the same period in 2020, but a decrease of 814,000 couples versus 2019. It is believed that with the gradual improvement of the epidemic, the wedding market will usher in a round of growth in the future.

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