New York: ‘China’s appetite for diamonds has waned recently alongside the volatility in the country’s stock market’, said Jean-Marc Leiberherr, managing director of Rio Tinto’s diamond division in an interview this week as reported in The Wall Street Journal. “We see that people are postponing their nonessential purchases and avoid buying overly conspicuous goods,” he said.

While China is still the second largest diamond market in the world after the U.S., Rio Tinto Diamond opines that the continuing global economic slump and China’s own decelerated growth means that the brighter days of double-digits growth in diamond sales seen between 2010 and 2014 is likely a thing of the past.

‘Thanks to the frosty consumer demand Chinese retailers such as Hong Kong-listed Chow Tai Fook, the world’s biggest jewelry chain, are stuck with large inventories that could take 12 months or more to clear’, Leiberherr said. “What the Chinese market is experiencing now is a clog in the supply chain,” he added.

However, Rio still remains optimistic about the longer term prospects for the Chinese diamond market. Leiberherr said the company expects the industry to grow by 8-9% a year for the decade beginning in 2017, mostly driven by Chinese demand. And, China’s taste for diamonds is evolving thanks to the country’s growing middle class.

“We see China’s demand for high-end diamonds is largely stable because diamonds are seen as a status symbol for the rich, but we also see a growing demand for the low-end diamonds used for fashion jewelries,” he said. “Middle-class Chinese are not buying the high-quality diamonds at moment, but at least they are getting into the diamond category and that to us, is always a good sign.”

But a wider consumer base and stronger purchasing power are not the only factors driving confidence in the Chinese market. He sees ‘love’ exists among the youth even if relationships are not permanent; and expressing love through diamonds will go on forever.