Diamond trading in China - The best place to recover from the recession?

I read in an article about a month and a half ago about diamond traders from India which moved to China, hoping that China's development and diamond demand could pull them out of the recession, and be a much more stable market than those in Europe, Us and even India. According to the article several retail outlets were opened across China, including Beijing, Shanghai and additional southern cities. Even without considering the current recession, it is predicted that the China diamond market, along with the diamond markets neighboring Taiwan, Hong Kong and Korea could become as profitable as the US one.

For Indian diamond polishing companies this move could be very crucial. During the second third of 2009 India's export of diamond market was about five percent lower than in 2008 and wise steps are needed to change this trend. After many thousands of Indian diamond polishers remained without work throughout the global recession, things are improving, and the Chinese demand could only induce this recovery.

It seems that Indian companies are taking advantage of China's cheap labor and modern equipment, making it an ideal place for opening jewelry stores. China and India are still, and will remain competitors in terms of diamond production, but in some cases the can also co-exist quite smoothly. When it comes to diamond polishing, India still has the edge due to its very experienced workers, but Chinese diamond production companies, with the help of the government which is providing them some benefits, are on their way to close the gap.

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It is true that China is much more immune to this economic crisis than probably every other country on the globe. Sure some companies take advantage of this situation, but the fact that China is handling the crisis better than other countries doesn't mean that there are no signs of recession there. Now is not the time to expand business, no matter where. Diamond companies need to recover, stand on their feet and then consider opening new branches. Generally speaking, in recent years there's a trend of taking advantage of the Chinese demand for jewelry and many stores and dealers are offering their supply to the Chinese customers. Perhaps the most noted expansion is that of famous store Tiffany's, which have opened many branches throughout China in recent years.

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There's also an increase in the export of polished diamonds from India to China and Hong Kong. Between April and September 2009 there was a 9% rise in polished diamonds on the route between India and China. During this 6 month India exported more than $3000 million worth of diamonds to Hong Kong, about $150 million more that the same period in 2008. In September 2009 a significant increase was reported, 11% more than in Sep 2008.

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