The United States was once seen as the emerging front of the diamond market. It was the land of the American Dream, mass-consumerism, and new money. However, the United States’ economy is lagging behind the high growth markets in the east, namely India and China. While demand for Diamonds in the United States fell after the global economic crises in the past decade, markets have in fact surged in the East, to the point where within a decade, Chinese demand for diamonds could reach the same level as the United States.

De Beers has long been the monopoly holder of diamonds in the world, amassing about 95% of the World’s supply of diamonds at one point. They source their diamonds from Africa and India, and release it through select avenues and retailers on a limited approval basis. In an interview this month with London’s Financial Times, the Managing Director of De Beers, Garreth Penny stated that “What we’re now seeing, with China growing as rapidly as it is, [is] annual double-digit growth compounded over a period of five years.”

However, it appears that the surge of the diamond market in China is not solely due to the solid performance of the local economy and stock markets. A lot of it has to do with the wedding culture and traditions in China. According to Penny, 20 years ago, it was rare for Chinese brides to receive diamond engagement rings. However, today about 50% of couples married in Beijing, Shanghai, and Guangdong buy them.

The growth of the diamond market in China is significant, since in 2009, China only accounted for 6-7% of the global diamond market, while the United States accounted for about 40% of it. De Beers has forecasted the Chinese demand to more than double by the year 2016.

A similar trend is visible in India today, where “the diamond jewelry business has been showing a growth rate of about 15% at a time when [just gold jewelry] has shown negligible growth.”The diamond jewelry market in India has been surging, and is representative of similar activity in India. According to experts, this is because with gold prices at an all time high, consumers are moving from investing in pure gold to diamond jewelry.

According to latest figures, in May 2010 alone, India’s polished diamond exports rose 73% from last year, to almost $1.8 billion. India has long been labeled a major hub of diamond cutting and polishing, and has a hand in 9 out of 11 diamonds that are produced around the world. Apart from India, Honk Kong and Dubai are also emerging as key trading areas.

It will be interesting to see how the balance of power between diamond trading centers shifts over the next decade. While the diamond industry is rebounding well from the global economic collapse of the past decade, there are many issues the diamond industry must deal with over the next decade, especially a decline in the diamond supply in the future. According to Penny, “These great mines that were discovered 10, 20, 30 years ago are not being replaced today. According to the data that is out there, we’re going to see some significant declines in diamonds.”