Why Hong Kong is essential platform for Israel diamond industry

September 14, 2018 13:10
Asia is Israel’s second-largest market for polished diamonds, with Hong Kong accounting for the largest share. Photo: Reuters

Last year the Chinese spent US$13.12 billion on diamonds, accounting for 16 percent of the global market and up 3 percent on 2016.

They are one of the main reasons for the Hong Kong Jewellery Gem Fair 2018, which is being held from Sept. 12 to 18 at the AsiaWorld-Expo and the Hong Kong Convention and Exhibition Centre. A record 3,700 exhibitors from nearly 60 countries and regions are taking part in the 36th edition of the show. About 59,000 buyers from 147 countries and regions are expected to attend.

One of the largest delegations is from Israel, which is represented by 79 companies. The country is one of the three largest global centers of polished diamonds, along with India and Belgium.

Asia is Israel’s second-largest market for these diamonds, with Hong Kong accounting for the largest share. Other important markets are China, India, Thailand, Singapore, Taiwan and Japan.

In the first half of this year, Israel exported US$2.42 billion worth of polished diamonds, down 6 percent on the same period last year, according to figures from the Ministry of Industry, Trade and Labor.

Polished diamond imports rose 7 percent to US$1.496 billion, making the net amount of polished diamond exports US$922 million.

“Asia is a key target market for our industry,” said Boaz Moldawsky, chairman of the Israel Diamond Institute (IDI), a non-profit, public-interest body that promotes the country’s diamond industry. “We are seeing a definite rise in demand for diamond jewelry in these markets, especially in China. The long-term prospects for Asia as a market for polished diamonds from Israel are encouraging.”

It is for this reason that the IDI organizes large national diamond pavilions at four trade shows in Hong Kong each year – in March, June, September and November.

The IDI pavilion at the September fair has three “Get Diamonds Shows” search terminals, a platform that enables buyers to search a database of all goods offered by Israeli exhibitors at the fair. It is available in Chinese and English and on smartphones.

The IDI will award several free trips to buyers who participate in an auction of special stones; the trips will coincide with International Diamond Week in Israel at the end of January 2019.

China has become the world’s second-largest diamond market, after the United States. In 2017, almost half of all Chinese brides received a diamond ring as part of the wedding ceremony, according to a study by De Beers published on Thursday. In China, buyers under 40 bought nearly 80 percent of diamond jewelry, compared with 60 percent in the US, it said.

The Israel Diamond Exchange (IDE) is building a new manufacturing facility to polish large stones sent by Chinese diamond companies. In June, the IDE signed a memorandum of understanding with the Shanghai Diamond Exchange to set up the new plan. Iit involves an investment of more than US$3 million in the IDE complex in Ramat Gan, with two cutting centers covering 1,100 square meters and 150 polishers. It is due to open in January 2019, during the International Diamond Week.

Low-cost competition from India has caused a reduction in polishing in Israel, but the cutting of bigger diamonds has remained there. “This is a very unusual situation, whereby Chinese diamantaires send their large diamonds to be polished in Israel,” said IDE president Yoram Dvash.

Economic relations between the two countries are booming. In 2017, bilateral trade was US$13.1 billion, up 15.6 percent on 2016 and making China Israel’s third-largest trading partner. According to figures from HSBC, Chinese investment in Israel reached US$6.5 billion at the end of 2017, while Israeli investment in China totaled US$380 million at the end of 2016.

In July this year, more than 2,000 companies and 6,000 people from the two countries attended the 4th China-Israel Investment Summit in Zhuhai.

Last year China became the fastest-growing source of tourists in Israel, reaching 113,600, up 41 percent on 2016, according to the Ministry of Tourism. Its target this year is 150,000.

This summer the ministry invited famous Chinese chefs to teach 400 Israeli chefs and cooks how to make Chinese dishes so that they can please the visitors.

Efrat Meir-Groman, director of vocational training in tourism at the ministry, said: “Chinese tourists are different from the tourists we are accustomed to, from Europe and the US. We noticed that, when it comes to food, we have a disadvantage because Israeli food is very different from what they are used to. We plan to have more Chinese cooking training sessions for Israeli chefs, so that they offer as many types of Chinese food as possible.”

Hotels are changing their breakfast and buffet menus to meet the tastes of the visitors.

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A Hong Kong-based writer, teacher and speaker.