Chinese investors are now laying their trust in jade besides real estate, with prices for the precious stone forecasted to keep climbing in the future.
Kitty Chan, a director at the Hong Kong Jewellery and Jade Manufacturers Association told the Financial Times, “From 1990 to 2000, pretty much when you go to the jadeite market when you resell your piece usually the best you can do is times 1.5 or times 2 [in price]. But now if you get like a good piece, the price can go up by times 10.”
As a stand-in, investors will buy completed jewelry carrying the green stone. Now, Kitty Chan says that purchasers are also setting their eyes on semi-finished pieces, which are not often regarded as investment-quality.
Jadeite, considered a high-quality jade, is gaining traction over a combination of events.
For one thing, supply is running low after Myanmar went through a coup and a subsequent civil war last year. This prompted the U.S. to place sanctions on several Myanmar organizations connected to the military, including its principal licenser and regulator Myanmar Gems Enterprise.
70 to 90% of the world’s high-quality jadeite came from this Southeast Asian nation.
Tommy Chan, a Hong Kong business owner, says, “The production [of jadeite] is getting less and less. The value of jadeite will definitely go up.”
Daryl Ho, a senior investment strategist at Singaporean bank DBS, says investors are driven to “bearer assets” that they can keep without relying on intermediaries like banks after the Ukraine war.
He said when sanctions were slammed on Russia, “We saw how people lost half their net worths at the stroke of a pen.”
For Chinese investors, their homeland’s ailing economy is pushing other options out on a limb.
China’s equity indices are unpromising this year, with the benchmark CSI 300 index for the nation losing more than 15% year to date, while the Hang Seng index for Hong Kong has reduced by 13%. A downfall ensued from the country’s loyalty to its zero-COVID policy and the fraying U.S.-China relation.
Looking over the real estate industry, prospects are gloomy as well. House prices have dropped for the 10th consecutive month after Beijing began to rein over developer debt and restricted mortgage lending. China’s corporate bond market is also vulnerable after the surge of defaults in the sector.
Will Wang, a manager at VP Wealth Management says, “Investors have to consider how to diversify. Many investors will see jade and jadeite as part of their asset allocation.”