By 
The United States was once seen as the emerging front of the diamond market. It was the land of the American Dream, mass consumerism and new money. However, the US economy is lagging behind the high-growth markets in the east, namely India and China. Although demand for diamonds in the United States fell after the global economic crisis in the last decade, markets have actually increased in the East, to the point where within a decade, Chinese demand for diamonds could reach the same level as the United States.
De Beers has long been the world’s diamond monopoly holder, amassing around 95% of the world’s diamond supply at any given time. They source their diamonds from Africa and India, and release them through select channels and retailers with limited approval. In an interview this month with London’s Financial Times, De Beers managing director Garreth Penny said that “what we’re seeing now, with China growing as fast as it is, [is] double-digit compound annual growth over a five-year period.
However, it appears that the boom in the diamond market in China is not solely due to the strong performance of the local economy and stock markets. A lot of this has to do with the culture and traditions of weddings in China. According to Penny, 20 years ago, it was rare for Chinese brides to receive diamond engagement rings. However, today about 50% of married couples in Beijing, Shanghai and Guangdong buy them.
The growth of the diamond market in China is significant, as in 2009, China only accounted for 6-7% of the global diamond market, while the United States accounted for around 40%. De Beers has forecast that Chinese demand will more than double by 2016.
A similar trend is visible in India today, where “the diamond jewelry business has shown a growth rate of around 15% at a time when [just gold jewelry] has shown negligible growth.” The market for diamond jewelry in India has been increasing and is representative of similar activity in India. According to experts, this is because, with gold prices at an all-time high, , consumers are shifting from investing in pure gold to diamond jewelry.
According to the latest figures, in May 2010 alone, India’s polished diamond exports increased by 73% over last year, to nearly $1.8 billion. India has long been labeled as a major center for diamond cutting and polishing, and is involved in 9 of the 11 diamonds produced worldwide. Apart from India, Hong Kong and Dubai are also emerging as key trading areas.
It will be interesting to see how the balance of power between the diamond trading centers changes over the next decade. Although the diamond industry is recovering well from the global economic collapse of the last decade, there are many problems that the diamond industry must face over the next decade, especially a decline in the supply of diamonds in the future. According to Penny, “These big mines that were discovered 10, 20, 30 years ago are not being replaced today. Based on the data that is out there, we’re going to see some significant declines in diamonds.”