China established its Shanghai Diamond Exchange in 2004 and has never looked back. Barring some issues as well as fraud instances, the volume of diamonds transacted through the SDE has grown to the extent that it is now the 3rd largest diamond exchange in the world.

The advantages seem to be the following:

• 0% tax for uncut and cut diamonds if traded between members of SDE
• 4% tax for cut diamonds sold into China via the SDE vs 17% if otherwise sold outside the SDE
• gateway to the 2nd largest market for diamonds after the USA

Millennials (aged 15 – 34 yrs) account for USD 25 Billion (+50%) of diamond retail sales in USA, China, Japan, India (*2015)
Chinese Millenials are purchasing diamonds for engagements, marriages as well as for personal satisfaction. +1 carat are especially in demand. There are over 200 Million Millennials in China

China is No.2 after USA. The 4 largest markets account for 73% of total diamond sales. Transaction volume over USD 5 Billion (*2012). There are over 400 SDE Members.