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Diamonds becoming an investor's best friend

By Shen Jingting (China Daily)
Updated: 2010-07-12 10:21
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Diamonds becoming an investor's best friend

Beijingers are seeing diamonds as a good investment besides stock and property markets. [MIKE CLARKE / FOR CHINA DAILY]

If you ask Beijingers about the two things they are most interested in from South Africa, they are likely to say the World Cup and diamonds. With football fans yelling, singing and dancing as they have watched the performances of the 32 national soccer teams in the World Cup in recent weeks, South Africa has certainly grabbed a lot of short-term attention.

But Beijingers' long-term interest is increasingly being snared by the idea of buying diamonds and treating them as investment products.

Diamond sales in Beijing have surged since May, the season along with June that Chinese people typically choose for their weddings. Part of the reason for the surge is the fact that newlyweds were buying more rings containing the sparkling gem.

Beijing's largest diamond marketplace - M&L plaza - saw a 30 percent rise in revenue in May and June, compared to previous months.

Other department stores, such as Gongmei Group, Beijing Caibai and Hiersun Diamond Plaza, have all experienced a revenue rise of between 20 percent and 40 percent.

Buying diamond wedding rings is becoming increasingly important for young Chinese couples, according to research conducted by Hiersun, a leading Chinese jewelry company that claims around 80 percent of Chinese couples in some big cities now buy diamond rings when they tie the knot.

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However, industry experts say the sharp rise in diamond sales is about more than a growing trend to buy diamond wedding rings; people are seeing diamonds as a good investment.

Sales officials from M&L said wealthy people from provinces including Shanxi, Zhejiang, Jiangsu and Inner Mongolia are the ones buying up most of the capital's diamonds.

The buyers are especially interested in unset stones.

"I clearly remember a Shanxi client purchasing nine loose diamonds at one time in our store, paying 3 million yuan in cash," said Li Pengcheng, market director of M&L.

Similar purchases of unset diamonds have become common recently, said Li.

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