What’s Causing China’s Diamond Slump? – by Avi Krawitz (Rapaport Magazine – April 24, 2024)


In mid-2023, as China’s real-estate crisis lingered, property firms started to offer gold bars as an incentive to buy their apartments. Unlike real estate, gold is perceived to hold its value, the theory went. Then again, companies also presented new cars, cell phones, free decorations and parking lots to woo customers and boost sales.

Their efforts bore little fruit, however, as supply continued to outweigh demand. Housing starts have fallen by more than 60% relative to pre-pandemic levels, according to a February Report by the International Monetary Fund (IMF).

The property slump, along with several other factors, is having a marked effect on consumer confidence and the diamond market, acknowledged participants in the Presidents’ Meeting of the World Federation of Diamond Bourses (WFDB), which took place in Shanghai in early March. “People put a lot of money in real estate, and some in stocks, so when you see the downturn at such a high level, it has a major impact,” said Abhishek (Andy) Golecha, general manager of KGK Shanghai, the local branch of India-based diamond manufacturer KGK Group.

Along with the property crisis, trade tensions with the United States and the pandemic are having a residual effect on consumer spending, panelists noted in a discussion titled “Natural Diamonds in the Chinese Markets.”

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