Prices For Quality Jade Have Skyrocketed In Recent Years
Last year, the New York Times looked at the booming demand for high-quality jade among wealthy Chinese. “The jade boom,” the Times wrote, “which appears to have reached a frenzy in the past year or two, has been fueled by the Chinese, whose new wealth and a 5,000-year affinity for the stone” had made instant millionaires of cotton-farmers-turned-jade-tycoons in the country’s remote west. With more Chinese buying jade not only as an accessory but more commonly for investment value, fears began to arise that the country’s jade boom was actually turning more into a jade bubble, particularly after the price of an ounce of jade surpassed that of gold late last summer.
Over the past six months, however, these fears have failed to damper the enthusiasm for this precious stone among a certain group of Chinese individuals; namely, those looking for hedges against inflation — the same ones we see getting increasingly involved in the jewelry, rare watch, art and wine auction markets.
Now, what we’re starting to see in China is a sort of greater legitimacy in jade investment, spurred on by high-profile institutions like China Guardian Auction House and Bank of China. Last weekend, experts from China Guardian and Bank of China took part in a jade-heavy jewelry exhibition in Fuzhou, Fujian Province, that served not only as a platform for wealthy individuals to see the latest and greatest, but also to learn more about appraising, collecting, and storing jade to maximize value. Whether a jade bubble is forming was secondary to these experts, who seemed confident that increasing demand would keep prices high over the long term. At the event, experts were on hand to teach attendees everything they need to know about jade: how to tell the good from the bad, understanding the effect that skillful carving has on price, and what types are most likely to appreciate in value.
As Zhang Linyue, head of private banking at Bank of China, said at the event, the growing interest in jade and jewelry as an investment vehicle indicates that the jewelry industry in China is “entering a high-growth period.” Said Zhang:
“In the current period of instability in the international currency markets and a loose monetary policy [in China], investors have come to expect high inflation, so they’re starting to see gold and other precious metals as a hedge against inflation and a store of value. As such, demand from those who want to invest in these hedges has increased significantly.
“Consumer demand for and spending on jewelry, and investment in precious metals and stones is causing a demand-driven increase in prices. What this means is that the jewelry industry is entering a high growth period.”
Whether jade continues to gain popularity as an investment vehicle — or if a bubble is indeed forming that will eventually shake out the market — one thing that is certain is that antique jade will likely remain popular among Chinese collectors at auction. Last year, we noted that Chinese buyers are willing to spend tens of millions of dollars for certain lots from the eras like the Qianlong period of the early Qing Dynasty. Expect to see more of this extravagant buying at the upcoming spring auctions in Hong Kong as well as mainland China. Because if there’s one thing that is noticeable about Chinese “hedgers,” it’s their insistence on buying certain objects, potential bubble be damned.