RAPAPORT... The Year of the Pig did have an ugly tail. Just before the Chinese New Year, southern China was devastated by its most severe snow storm and icy rain in 50 years, which caused more than $21.2 billion of direct loss, according to government figures. Millions of people were stranded on the road and could not get back home for family reunions.
In spite of this, consumer spending surged 16 percent during the Chinese New Year’s Golden Week holiday, which began February 7. In major cities, high-end household appliances, digital products, jewelry and thick overcoats were hot sellers. Government figures estimated that consumers spent about $35.6 billion, up from $30.7 billion in 2007.
China Gold newspaper reported that there were problems with the intercity distribution of diamonds and jewelry because of the bad weather and the paralyzed transportation systems, and jewelry companies had to find other ways to deliver the goods to retail locations. Nevertheless, the major cities in China, such as Shanghai, Beijing, Tianjin and Ningbo, all reported increases in diamond and jewelry sales during the weeklong holiday. The Chinese New Year Golden Week is traditionally a peak season for weddings and gift giving. Valentine’s Day sales were also satisfactory this year.
Year of the MouseThe mouse is small, but smart enough to lead off the new 12-year cycle in the Chinese zodiac. People born in the Year of the Mouse are regarded as smart, nimble and filled with enterprising spirit. According to Chinese tradition, they should buy mouse-themed jewelry as a talisman. Year of the Mouse gold bars and figurines of various sizes also are popular for investment, collecting and gift giving.
In 2008, Mickey Mouse turns 80. Forever young and restless, Mickey Mouse is showing up in the collections of various jewelry groups, including Chow Tai Fook and Chow Sang Sang, for further expansion of themed Mickey Mouse items in China. Meanwhile, the major B2C websites have also announced increased internet sales, which means the computer mouse also can be expected to be more cheerful this year.
Preparing for the 33rd World Diamond CongressThe 33rd World Diamond Congress (WDC), a joint effort of the World Federation of Diamond Bourses (WFDB) and International Diamond Manufacturers Association (IDMA), will be held May 12 to 15, 2008, in Shanghai. Its host, Shanghai Diamond Exchange (SDE), recently launched the website www.worlddiamondcongress2008.com for information, agenda and registration.
“We’re very confident that this year’s WDC is going to be highly successful, which in great part will be thanks to the congress’s organizers and hosts, the Shanghai Diamond Exchange,” said WFDB President Ernest Blom.
Yan Nanhai, vice president of SDE, told RDR, “We have been busy preparing for the congress since last year and have planned a lot of special sessions and unique features. We are expecting around 400 delegates from more than ten countries.”
Authorized by the State Council, the SDE is the only diamond exchange in China and it has enjoyed favorable taxation policy — 0 percent import tax and 4 percent value-added tax (VAT) for polished diamond imports — since 2006. As a member of the WFDB, the SDE, which has 209 members, operates in accordance with the international practices of the diamond industry.
A recent report by the Diamond Administration of China (DAC) said that diamond imports, exports and other transactions on the SDE increased 53.4 percent to a record $1 billion in 2007. Total diamond imports and exports rose 58.7 percent to $909 million, while transactions on the SDE internal exchange increased 56.3 percent to $56.3 million. Diamond imports surged 109.6 percent to $440 million, 98.9 percent of which is polished goods.
Thai Gems Tying Into OlympicsThe Thai Gems and Jewellery Traders Association (TGJTA) plans to open jewelry shops in five-star hotels in Beijing in time for the 2008 Olympic Games in August. The nation’s Commerce Ministry is spending $2.6 million on promotional advertisements in Beijing for Thailand’s products and services during the Olympics. Thailand’s exports to China rose 26.5 percent to almost $15 billion in 2007 for jewelry, games, services and food, and the government wants to increase that total to $18.5 billion in 2008. Pisanu Riengmahasarn, deputy permanent secretary of Thailand’s Commerce Ministry, said the Olympics provides a good opportunity to stimulate long-term export growth to the many visitors from around the world who will visit China during the games.
The Marketplace• The wholesale market was relatively quiet after the Chinese New Year because most suppliers had not yet returned from the holiday vacation.
• Demand is good for 0.30 to 0.70 carat G+/VS+.
• Larger stones in 1 carat+/VS+/H+, GIA certified and fine make, continue to sell well.
• Inexpensive jewelry and promotional items, such as rings and pendants with small diamonds, sold well for Valentine’s Day.
• Mouse-themed jewelry and the Year of the Mouse gold bars are popular.
• Platinum jewelry prices surged after South African mining companies were asked to reduce production to 90 percent of capacity in response to the shortage of electric power in the country.
Article from the Rapaport Magazine - March 2008. To subscribe click here.