China’s Diamond and Jewelry Industry Opens it Gates to the Outside World – How will it Work?

Dec. 28, 2009 - PRLog -- Last week I visited the Chinese city of Panyu, which is situated in China’s southern province of Guangzhou, not far from Hong Kong.



Panyu currently houses more than 400 jewelry manufacturers and over 70,000 jewelry industry workers. Some 70% of the jewelry reaching Hong Kong is manufactured in Panyu.



Panyu is also considered a leading manufacturing center for various goods including electronics, chemical products and garments. Many of the manufacturing facilities are owned by companies from Hong Kong, which manufacture in China while staying “close to home.” (The distance between Hong Kong and Panyu is 90 minutes by ferry.)



The Worldmart (WM) Company (a government-supported, private company) is currently in the process of establishing an industrial park in Panyu which will include manufacturers, jewelry stores and logistic services. It currently is comprised of 40 jewelry factories from 13 different countries including China, India, the US, Belgium and several Southeast Asian countries.



The Panyu region is now being developed by the Chinese government with the aim of turning it into an operation headquarters of jewelry manufacture including diamond trading.



Worldmart offers a one-stop service for all sorts of logistic needs including storage, customs clearance and a government gemological laboratory (NGTC), as well as insurance and conveyance services, to serve both the manufactories in Panyu and the ones in the Pearl River Delta Region.



The company also offers diamond importing services into China to diamantaires .Diamonds will be brought tax-free into China through a bonded warehouse where they can be shown to buyers. If the diamonds are purchased, a subsidiary company of Worldmart deals with all of the import procedures via Shanghai SDE.



I spoke to Johnny Chan, CEO of Worldmart Jewelry and Gems Emporium, and Tony Leung, Deputy General Manager of Guangzhou Weile Jewelry Industrial Park.



Mr. Johnny Chan explains how the process of importing diamonds via Panyu will work: Upon becoming a member of Worldmart, foreign diamantaires can then import diamonds to China through WM. Diamonds are imported directly to the bonded warehouse, and no tax is imposed for sampling or finding potential customers. If the foreign diamond trader is interested in selling to manufacturers, then payment will be settled between the foreign suppliers and the diamond polishing factories/trading companies in Panyu. If the diamond sales are to the domestic market, Worldmart will then step in to complete the importation legally through the SDE. Payment will be made initially to the subsidiary company of Worldmart by the buyer, and then Worldmart’s subsidiary company will reimburse the suppliers.



If a foreign diamond trader chooses to establish a company in Panyu, the diamonds can be sent directly to its domestic company after being accepted as a SDE member. Diamonds can also be sold to the domestic market through the domestic company. In this case, the company will acquire payment and issue invoices independently. However, if the company is not an SDE member, it will need to find a SDE member to import goods to its domestic company and payment will be made to the agent by the domestic company.



Mr Chan further elaborates: “If the rough diamond sales are to overseas buyers, the company will need to set up a processing factory or find a local subcontracted diamond polishing factory in the Panyu area of China to polish the diamonds. With the aim of encouraging foreign investment, the diamonds will be transferred from the foreign suppler to the diamond processing factory and then back again to the foreign buyer, without charging any import or export tax.



“However, it is important to understand that if the rough and polished diamond sales are to domestic buyers, a domestic company will need to be established or a SDE member must be found to import diamonds on behalf of the suppliers. Fortunately, WM is qualified to import diamonds to China, and will not be obligated to pay a customs tax for rough diamonds, but following the polishing process and sales, customs taxes of 4% VAT will be charged.”



Mr Chan underscores that foreign diamantaires require a domestic trading service platform. This is where Worldmart enters the picture. Worldmart is completely familiar with the local laws and culture, and has a good ongoing relationship with related government departments, which serves to facilitate foreign business in China.



In addition to close cooperation with professional logistic service providers, Worldmart provides crucial information and advice about the needs of China wholesaler and retailers, business matching, tax-bonded warehouse service and more



The Deputy General Manager of Guangzhou Weile Jewelry Industrial Park, Mr. Tony Leung, explains the crucial role that Panyu will play in the near future. “Up to now, Panyu and Hong Kong have operated in close cooperation. Panyu is now taking advantage of its prime location and its excellent investment conditions as well becoming a highly qualified and integrated service platform. Generally speaking, Panyu is a center which integrates production, research, operating and trading. Hong Kong is a financial center which can serve as a springboard for any foreigner interested in entering the China market.



When it comes to Chinese jewelry preferences, Mr. Leung notes: “It is difficult to define exactly what jewelry the Chinese consumer prefers and what trends currently prevail in China. The Chinese are individuals who choose different jewelry according to their own tastes. One thing we do know is that Chinese living in the China’s Northern Province likes colored stones and diamond-embedded gold jewelry, while in the south; people prefer PT, and simpler styles.



Worldmart and their partner logistic service provider will visit the Israeli Diamond Exchange in January to present and promote their diamond trading platform.

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The Israeli Diamond Industry organizations
Behind the Israeli Diamond Industry are a group of vital and dynamic institutions. Each one is responsible for a different aspect of the industry’s activities.