|
VAT cut aims to curb illegal diamond trade
By Lillian Liu (China Daily)
Updated: 2006-07-14 08:50 "Many diamond industry players in China, including manufacturers, retailers
and wholesalers, are now likely to legalize their business," Concept Jewellery
Manufacturing Executive Director Fiona Wong said.
And that will take the
country's diamond and jewellery industry to a much higher and more professional
level, the top executive of the Hong Kong-based jewellery processor
added.
A spokesman for Wing Hang Diamond, Hong Kong's leading diamond
trading company, said the move would encourage his company to increase
investment in its existing mainland gem units.
"That up to 90 per cent
diamonds enter the country through illegal channels is a great cause for
concern. Chinese Customs collect a very meagre amount of VAT because only over
10 per cent are imported through lawful exchanges," he said.
Diamonds
were first recognized and mined in India, with the earliest written reference in
Kautilya's Arthasastra (The Science of Economics - 296 BC).
But in
February 2005, a joint Chinese-US archaeology team found four corundum-rich
stone ceremonial burial axes dating back to China's Liangzhu and Sanxingcun
cultures (4,000 BC-2,500 BC) that were believed to be have been polished using
diamond powder.
However China has been a late entrant to the diamond
trade, setting up cutting and polishing centres to take advantage, like India,
of low labour costs. Diamond cutting and polishing is a highly specialized skill
concentrated in a handful of cities, such as Antwerp (Belgium), Amsterdam (the
Netherlands), Johannesburg (South Africa), New York (the United States), Tel
Aviv (Israel) and Surat (India).
Though India handles about 90 per cent
of all cut and polished diamonds by number, it accounts for only 55 per cent in
terms of value. That's because larger or more valuable diamonds are more likely
to be handled in Europe or North America.
Diamonds are sold in carats and
valued according to the "4 Cs" carats, clarity, cut and colour. The carat
weight measures the mass of a diamond, with one carat defined as exactly 200
milligrams (about 0.007 ounce).
(For more biz stories, please visit Industry Updates)
|
| |
|
| |
|
|
|
| Most Popular Stories in 48 Hours |
|
|
|
|
