Currently, the Shanghai Diamond Exchange Center, the only legal trading channel in China, has 94 members, 63 of which are foreign-funded or from overseas. It was authorized to deal with all diamond import and export for general trade beginning June 1, 2002.

However, such an import volume lags far behind consumer demand for diamond products in China. Diamond smuggling is still a widespread problem.

The Shanghai Diamond Exchange Center imported US$37.4 million-worth of diamond for ornament making, including finished diamond ornaments and raw diamonds, in the first 11 months of 2002,making up 97.7 percent of the company's total diamond import. Finished diamond for making ornaments constituted 86 percent of the total import.

The other US$900,000 worth of diamond imports were for industrial use.

Meanwhile, the center exported US$1.05 million-worth of diamond, accounting for 31 percent of its total export. Nearly half of the imported diamond was used for making ornaments. The large percentage of imported diamond for ornament-making indicates China's demand for diamond remains brisk.

(Edited from Xinhua News Agency January 2, 2003)