In 2005, the China Daily reported that as much as 6,000 years ago, Chinese craftsmen may have learned to use diamonds to grind and polish ceremonial stone burial axes. Researchers at Harvard University have uncovered strong evidence that the ancient Chinese used diamonds with a level of skill difficult to achieve even with modern polishing techniques.
These days, diamonds are taking off in the mainland - but more with aesthetic aspirations in mind. In 2004, according to the People's Daily, 80per cent of brides across the mainland were choosing diamond rings for their weddings, an incredible turnaround for a place that previously had no diamond culture, preferring jade, gold and other semi-precious metals.
According to Reuters, the mainland is the fifth-largest diamond market in the world, but the second-fastest growing diamond consumer market globally. Last year, consumers bought US$1.7 billion in diamonds and that number is expected to go up 12 per cent this year. According to Merrill Lynch, there are more than 300,000 people in the mainland with a net worth of more than US$1million each.
With the huge growth in demand for diamonds coming from both the mainland and Indian markets, the diamond industry needs to prepare itself for dramatic changes in terms of its customer base and where the diamonds are sourced from.
Lawrence Ma Yung-yi, president of the Diamond Federation of Hong Kong and chief executive of Lee Heng Diamond Group, said those changes were already happening, particularly with South African company De Beers losing its controlling share of the market.
'The supply is not as concentrated - mainly from De Beers - as in years gone by,' Mr Ma said. 'It is now more diversified, with diamond sources in Russia, Canada, Australia and other countries. However, the supply has only seen a small growth for several years. The increasing demand due to a healthy growth in the world economy, especially from new markets, has outpaced the growth of supply, generally pushing up diamond prices. As retailers have not been able to pass on the entire increase in material costs for gold, platinum and diamonds to the consumer, some [traders] have squeezed their own profit margins; others have used lower quality stones instead.
