Standing outside the 15-story China Diamond Exchange Center, two darkened rectangular glass blocks are juxtaposed by the skylit atrium in between. The structure, which sits among some of the world's most impressive architectures that make up Shanghai's famous skyline, is home to the Shanghai Diamond Exchange.

From 16-carat yellow to red diamond, the building houses some of the world's rarest and most precious gemstones. Since its establishment 20 years ago, the exchange has been the definitive place for trading diamonds in China, overseeing billions of dollars worth of the gemstone going in and out of the country each year.

The bourse was created as a one-stop-shop that includes a variety of functions, including customs duty, quality control, and certification, escort as well all the other government and business services essential to diamond-trading in the world's second-largest economy.

Since China's economic reforms in the 1980s, the rapid expansion of the country's middle-class has seen demand for diamonds skyrocket. In 2001, the total worth of diamonds traded through the exchange was 140 million U.S. dollars. In 2014, that number soared to 5.1 billion, or roughly 36 times.

In recent years, diamond sales worldwide have experienced a significant slump due to a series of unfortunate events that included the China-U.S. trade dispute and the COVID-19 pandemic. Industry giant De Beers Group saw its revenue decreased by 54 percent to 1.2 billion U.S. dollars in June, compared to 2.6 billion earned during the same time last year.

Facing a global downturn, the diamond industry is shifting its resources around the Chinese market, which has become the second-largest market for diamond jewelry in the world, only behind the U.S. Due to the government's quick and firm reaction to the COVID-19 pandemic, China's economy has largely restarted and would become the only G20 country expected to see growth this year, according to forecast by the Organisation for Economic Cooperation and Development (OECD).

From a symbol of eternity to individuality

"A diamond can last forever, even one carat will be passed on for generations." This famous saying, which rhymes perfectly in Chinese, was popularized decades ago when jewelry companies first began to introduce the diamond's western concept to Chinese consumers. Since then, it has gradually become a symbol of everlasting commitment and overtaken traditional marriage gifts like gold products.

Much of this change is due to an influx of western love dramas and TV shows, which introduced brands such as Cartier and Tiffany Co. to millions of Chinese millennials and Gen Zers. With China's fast-rising "Wanghong" economy - a developing digital economy driven by influencer marketing - jewelry companies have also turned to internet celebrities for advertising.

When the Shanghai-born actress Angelababy posted her 1.6 million dollar Chaumet wedding ring on her social media account in 2015, it instantly became an internet frenzy for millions of Chines netizens. Even one year later, the "Angelababy ring" or Chaumet's Joséphine Aigrette Impérialewas remain the talk of the town in China's jewelry circles among enthusiasts.

"For the younger generation, diamonds are no longer bound to marriage. It is more of an expression of independence and individuality, revealing your taste," said Layla, an FGA certified gemologist and popular jewelry vlogger on China's video-sharing app Bilibili. "Even men would put on a diamond earring as a way of showing his good taste."

Nowadays, gifting diamonds from a partner before marriage represents as much as 40 percent of the value of all diamond jewelry received by women, outside engagement and weddings, according to The Diamond Insight Report conducted by De Beers in 2019.

Challenges ahead

While China's rapid digital adaptation has certainly helped jewelry companies get recognition, the increasingly digitized business environment has other side effects on the industry, specifically the brick-and-mortar businesses, according to insiders. 

A search of "diamond ring" on Chinese question-and-answer website Zhihu leads to a systematic education on diamonds, from budgeting to identifying quality picks using the "4C" criteria - color, carat, cut, clarity. It also contains other information and insider tips known previously only by experts. In the digital age, all this information is just one click away.

"Before the age of internet, the first thing that comes to mind for someone who wants a diamond are the stores in shopping malls," said Layla. "Now, people are armed with all types of information, maybe even more than the salespeople, before they make a purchase."

The increasing number of people interested in diamond jewelry is also an important factor, said Fu Qiang, an industry expert who has over 10 years of experience in China's burgeoning diamond industry.

"As more people get into diamonds, profits of the diamond industry has declined over the years," Fu Qiang told nbd.com.

China's technological advancement is also having an impact on the market. In recent years, manufacturers are working on mastering the secrets in making synthetic diamonds, which exhibit better quality and much cheaper to produce. The revolutionary potential of a man-made diamond is also acknowledged by industry giants such as De Beers, whose attitude toward the new breed took a u-turn in 2018 when it began selling them through its Lightbox Jewelry brand.

Despite the ups and downs, Fu thinks Chinese brides will continue to be the industry's backbone.

"People will get married and diamond rings will be ordered, so the supply and demand won't change that much in the diamond market, it will remain relatively stable," said Fu.

(Video by Zhou Yiqiu, Wu Chutian)