How Have Asian Diamond Bourses Overcome the Recession

It is common knowledge that overall, the Asian economy has been doing very well in recent years. The combination of cheap labor, high production rates and a growing middle class has made some Asian nations both production and consuming forces in the global economy. Still, taking this situation for granted and overlooking the economical policies implemented in such countries would be giving them little credit and perhaps keeping ourselves uneducated about policies, which could perhaps be implemented in the West as well. In the context of the diamond industry, this issue is particularly significant.

At the end of June 2009, the WFDB (World Federation of Diamond Bourses) Asia Summit was held in Hong Kong. During this convention, the presidents of diamond bourses in the region elaborated on the methods they have implemented in dealing with the economic crisis.

Chinese representatives explained that the Shanghai Diamond Bourse managed to get back on its feet quite effectively, much due to the economic stimulus package set by the Chinese government. Generally, it seems that China's GDP for 2009 might exceed the stats for 2008, with the diamond market fairly representing this growth. During the recession, China's tax regulations have become more permissive, promoting diamond trading between China and other countries. When one considers the severe damage to the economy and consumer demand in Western economies, which is well reflected in the diamond industry, it becomes clear that in the long run this recession might have had a positive effect on China's position in the global diamond industry.

As for Thailand, a new strategy was realized in the first half of 2009 by The Bangkok Diamonds and Precious Stones Exchange, which included an intense inducement of trading and production collaborations with Russia. According to reports, in May of 2009 more than 30 diamond production companies attended a special summit in Moscow, resulting in some new joint ventures. Furthermore, the government of Thailand issued a new policy, intended to exempt Value Added Tax on diamonds and special gems. This move will surely promote the rough diamond import of local companies.

New steps were also taken in Singapore. Seminars were organized by the DES (Diamond Exchange of Singapore) in order to educate its members about development in the local and global diamond industries. Although no surprising new financial policies have been launched thus far, these seminars seem to have had a positive effect on the local diamond industry. Some might even go as far as to say that such seminars have prevented it from falling into any undesired hibernation. Apparently, these conventions are promoting initiatives and allowing DES members to think about small improvements which could lead the diamond market to take a few steps forward. Some of the seminars were held in collaboration with the Singapore Jewelers Association.

In sum, without developing new trading options and permissive policies, the diamond markets of Eastern Asia would have found the financial crisis impossible to overcome. There is no doubt, however, that at least to some extent, the prominent recession effects in Europe and the US have made it easier for Asia's economies to attract diamond traders and dealers who find their Western fronts all too quiet.