Diamonds are expected to sparkle brighter in China amid a surge in domestic consumption and investment.
Antwerp, the world's biggest hub for diamond trading, will see China overtake the United States to become the Belgian city's biggest destination for diamonds exports by 2016, according to Ari Epstein, chief executive officer of the Antwerp World Diamond Center, which officially represents the city's diamond industry.
China imported a total of 9.28 million carats of both polished and uncut diamonds, with a total value of $5.09 billion, from the Belgian city in 2011.
The diamond center's transaction volume, which includes exports and imports, reached $60 billion in 2011, with four out of every five uncut diamonds coming from Antwerp.
The noticeable growth in demand coupled with rising interest in the gemstone as an investment product for Chinese consumers will drive the rise in diamond imports in the country, Epstein said on Friday.
He added that the upward trend will continue and will lead China to become the biggest destination for diamond exports by the end of 2016, without citing figures.
China briefly overtook the US to become the world's biggest diamond consumer in 2008, when the US was caught up in the global financial meltdown, but dropped back to second position when the crisis waned.
In 2011, the US was the biggest consumer of polished diamonds, accounting for 36 percent of total world demand, followed by China with a market share of 12 percent and India with 11 percent.
Epstein said that the rise in China's domestic demand has also triggered a rush to Antwerp by Chinese companies to trade in the gemstones. The rise of the middle class in China against the backdrop of an expanding economy has resulted in a buying spree for everything from gemstones to gold bullion to other luxury goods.
A report from the World Gold Council, published on Thursday, also projected that China will overtake India to become the world's top consumer of the precious metal this year because of rising demand for gold as jewelry and as an investment.
With regard to luxury goods, China is well positioned as the world's third-biggest consumer with total consumption worth more than 150 billion yuan (S$30.2 billion) in 2010. The country is expected to overtake Japan to become the global number two within three years, according to Frost & Sullivan, the business researcher and consultancy.
China is a demand-driven market, and with rising levels of prosperity and consumer spending, the country's imports of gemstones can only grow, Epstein said.
The Antwerp center plans to set up a "polished desk", either in Shanghai, or one of China's other heavily industrialized cities, to sell diamonds to jewelry companies.
The plan came after last October's cooperation agreement on diamond financing between the center and the Industrial and Commercial Bank of China Ltd, the country's biggest lender.
The diamond boom has also prompted the Chinese bank to decide to open up a branch in Antwerp. That may happen within the next six months.
Epstein said that China will become a more important manufacturing center for diamond cutting and polishing, regardless of the rising labor costs.