Tuesday, May 31, 2005
An emerging India-China battleground
Most of the bandwidth on competition between India and China has been hogged by China's attempt to break into the software market and India's attempt to become more competitive in manufacturing. And yes, much has been written in the past year about the competition for resources, especially for oil and natural gas. But, Keith Bradsher of the NYT argues that the competition between the two countries now extends into diamond polishing, an industry long dominated by India.
India excels at polishing diamonds as tiny as a hundredth of a carat. Masters of this craft in Antwerp, Belgium, and in Tel Aviv excel at handling diamonds of a carat or more. But pushing into the broad middle as the newest diamond power is China, a nation long enamored of jade that ignored diamonds for much of its half century of communist rule. The past is no longer holding it back. Several dozen privately owned foreign companies, most of them very secretive, have set up diamond polishing and jewelry manufacturing operations in China, many based here in a city about 80 miles up the Pearl River from Hong Kong. With a potent mix of experience, cheap labor, advanced technology and strict quality controls, they are challenging the industry leaders, especially India.
China now imports $800 million a year worth of rough diamonds and polishes them to become worth about $1.1 billion, accounting for 6 percent of the value added by the world's $4.6 billion diamond polishing industry. India, with a million diamond workers and an 80 percent share of the diamond polishing business, is nervous. Alarmed by the pace and skill with which China is improving, India's diamond industry leaders say that in diamonds, as in so many other businesses, China's advance cannot be stopped.
India excels at polishing diamonds as tiny as a hundredth of a carat. Masters of this craft in Antwerp, Belgium, and in Tel Aviv excel at handling diamonds of a carat or more. But pushing into the broad middle as the newest diamond power is China, a nation long enamored of jade that ignored diamonds for much of its half century of communist rule. The past is no longer holding it back. Several dozen privately owned foreign companies, most of them very secretive, have set up diamond polishing and jewelry manufacturing operations in China, many based here in a city about 80 miles up the Pearl River from Hong Kong. With a potent mix of experience, cheap labor, advanced technology and strict quality controls, they are challenging the industry leaders, especially India.
China now imports $800 million a year worth of rough diamonds and polishes them to become worth about $1.1 billion, accounting for 6 percent of the value added by the world's $4.6 billion diamond polishing industry. India, with a million diamond workers and an 80 percent share of the diamond polishing business, is nervous. Alarmed by the pace and skill with which China is improving, India's diamond industry leaders say that in diamonds, as in so many other businesses, China's advance cannot be stopped.
