Caroline Yuan, Vice President of the Shanghai Diamond Exchange, has kindly given this interview to Rough&Polished disclosing how much trade was done in 2011, giving a forecast for 2012 and describing the inner workings of the exchange.
Can you say what the trade turnover at the Shanghai Diamond Exchange was in 2011? And to what extent do you think it will increase in 2012?
From January to November 2011, the total diamond import and export operations reached 4.55 billion yuans (over $ 720 million). Diamond imports amounted to 1.88 billion yuans (nearly $ 298 million). The metrics for December are not yet ready, but the projected total turnover of the diamond trade is about 4.7 billion yuans ($ 744 million), which is about 60% more than in 2010. In 2012, the diamond trade may be reduced compared to the level of growth in 2011, approximately by 40%.
Why do you think the diamond trade may decline in 2012?
We look at the trend of the last few years. In 2009, growth reached 97% compared with a year earlier, whereas in 2010 it was 60%. Since the diamond trade cannot increase indefinitely, its growth is expected to reach a certain peak, after which there will be a downward trend. Based on this, we predict that the growth dynamics of diamond trade in the next year will be reduced.
What is the average number of transactions at your Diamond Exchange registered on a daily basis?
The diamond trade at our Exchange is not measured by the number of transactions executed every day, so the statistics are also not based on how many transactions we record at the Exchange every day. If you want to count the number of transactions performed at our Diamond Exchange on a daily basis, you can only divide the total trade turnover for the year by 365 days and get a mean value.
How many employees are engaged at the Shanghai Diamond Exchange?
At present, our Diamond Exchange has about 26 employees.
Is there an online trading system at your Diamond Exchange?
So far, the Shanghai Diamond Exchange has no online trading system installed, as we work on the basis of a membership system. Diamond deals are so far made in a fairly closed and private environment and in most cases participants contact each other directly.
Last year you told about the activities pursued by the Shanghai Diamond Exchange within the frames of interaction with the Government of the People’s Republic of China to develop a tax policy favorable for the diamond trade. Was there anything new on this front since then?
As I said in the interview last year, legislation cannot change often. As far as I know, over the past 10 years the laws regulating the diamond trade were amended only three times. The government has already provided great benefits. I think it is unlikely that this trend will continue to make further amendments. However, from the perspective of the diamond exchange, we shall continue to strive for dialogue with relevant government departments to improve certain provisions relating to the executive part of the laws to make them even more favorable for the members of our Exchange. We shall do our best in this respect. We shall also continue to improve certain aspects of our operations.
Dasha Platonova, Editor in Chief of the Asian Bureau, Rough&Polished
Lu Xiangdong for Rough&Polished, Shanghai
