China’s Diamond Import Rebounded Significantly 1H 2021


Press release: July 12 2021, Shanghai - With the Covid-19 pandemic effectively under control in China, the diamond import of the country has registered a hefty bounce in the first half year of 2021, after the gloomy market situation in the first half of 2020 followed by the recovery period in the second half. The surge in trading provides the clarity that China’s diamond market is walking out of the haze of the pandemic and returning to a normal growth track.


According to the data from Shanghai Diamond Exchange (SDE), From January thru June, the diamond transaction in SDE reached USD3.821 billion, representing 86.39% increase over the same period of 2019. Net polished import reached USD1.576 billion, already exceeding the annual import of 2020, and up 49.24% from 1H 2019. With the current growth momentum, the annual diamond import in 2021 is on its way to significantly outperform 2019 and is highly likely to surpass the previous record high level in 2018 (USD2.78 billion).

Since SDE was established in 2000,China’s diamond import has maintained an upward growth track, with an annual compound growth rate of 26% on average up to the historical high point in 2018. 


Due to the double impact of gloomy market sentiment and Covid-19 pandemic in 2019 and 2020, China’s diamond import has dropped by nearly 50% in the past two years. The recent strong bounce indicates that China’s diamond market is still on solid footing to maintain a long-term spiral growth track as the fundamentals of macro-economy keep stable.

China’s GDP grew by 18.3% in the first quarter of 2021, creating a record high of quarterly GPD growth rate in the history. As the citizens’ income increases and the domestic market gains further maturity, the driving force of China’s economy has shifted from export and investment to consumption. In spite of the pandemic in 2020, consumption still contributed 54.3% to the total GDP growth of the year. As China’s economy is estimated to maintain 5 to 6% moderate growth rate in the coming future, the diamond market will be most likely to achieve another decade of desirable growth.

“The strong rebound of diamond import not only benefits from the quick recovery of the China’s economy, specifically the release of consumption power restrained by pandemic and appreciation of the RMB which offset the increase of diamond price in USD, but also results from the strategic move of anti-smuggleand anti-money laundering initiated by the Chinese government. With the support of country’s special policies, Shanghai Diamond Exchange has provided a regularized channel for the diamonds imported into China and a platform to assist government to improve the supervision, which essentially safeguarded a healthy and sustainable growth of China’s diamond market in the past two decades. “President of SDE and Vice President of WFDB - Mr. Lin Qiang commented. 


Chinese Customs authorities spearheaded a nation-wide campaign to crack down diamond smuggling in September 2020, involving RMB5.9 billion (USD855 million) worth of goods. As a result, the carat weight and amount of diamonds imported through SDE and new membership applications surged, since it is China’s only gateway for importing diamonds under a favorable tax policy.  The SDE has also posted a nearly 100% growth in rough diamond import under normal trade category from January to June 2021. The total number of SDE members increased to 382, of which 210 are foreign-funded companies.              


With regard to the retail market, China’s diamond consumption has showed a localization trend due to the limitations of international travel. According to Bain’s report, China’s diamond retail market is estimated to drop 6% in 2020, but recovers more rapidly than others.

In the fourth quarter of 2020, China’sdiamond retail market achieved 15 to 20% growth as compared to 2019. From Janto May 2021, China’s jewelry retail reached RMB128.3 billion, 68.4% up year-on-year over 2019, according to the data of China statistics bureau. The wedding market once seriously affected by pandemic has also achieved quick recovery since the beginning of 2021. Over 2.1 million new couples registered for marriage certificates in the first quarter, 37% more than the same period of 2020. Based on the relevant data, China’s diamond retail market has basically returned to pre-pandemic level.


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