Analysis of Jade Investment Value

As the king of jade, jadeite itself contains a profound cultural heritage and has been passed down for thousands of years. Since jade has the traditional Chinese function of conveying moral truths, the shapes and patterns of its products reflect the best wishes of the Chinese people and are a concrete manifestation of China's blessing culture. At present, high-quality jade mines are becoming increasingly scarce. From a cultural and intrinsic characteristic perspective, the value of jade will increase day by day. As it shows an increasingly steady appreciation in value, jade is not only an ordinary jewel, but also the most advantageous and best collectible investment product.

1. Market overview of jadeite

Although China's jewelry industry started relatively late, with the relaxation of policies, the jewelry industry has developed rapidly and has become the world's second largest jewelry processing country. Entering the 21st century, China's jade market entered the fast lane and became the world's largest jade market. As early as 2005, my country's jewelry market ranked among the top in the world with a total sales of approximately 140 billion yuan and exports of 5.49 billion US dollars.

In the past 30 years, the price of jade has been rising steadily, and sales have been getting better and better, increasing at a rate of about 20-30% each year. It is known as the "crazy stone".

Although the jade market has shown signs of sluggish sales since the end of 2011, the craze is no longer there. However, by 2013, jade sales resumed their growth trend.

From the beginning of 2015 to November, the peak daily search volume for the word "jade" reached over 7,000, and the average search volume fluctuated around 5,000. According to statistics from the Taobao Index, the peak number of daily searches for jade-related products was over 50,000 in 2015. Even in the off-season of autumn and winter, the number of daily searches for jade remained stable at 15,000. Through data analysis of Baidu Index and Taobao Index, more and more people are beginning to pay attention to and become passionate about jadeite.

In 2016, China has become the world's largest jade consumption market. According to incomplete statistics from the industry, China's annual demand for raw jade and processing volume are nearly 10,000 tons, and the scale of expansion is on an upward trend. At present, China's sales volume of finished jade products accounts for more than 70% of the world's total, and its jade processing volume accounts for more than 80% of the world's total.

Moreover, due to the successive downturns in the stock market and real estate, the jade market will be one of the main investment directions for idle capital in society across the country.

2. Analysis of Jade Market Supply

The only origin of jade raw materials in the world is Myitkyina in Myanmar. In the past 10 years, the amount of jade mined in Myanmar has exceeded the total development volume in the past 300 years. Every year, 90% of the jadeite raw stones and 80% of the high-grade jadeite raw stones produced in Myanmar flow into China. As mineral resources gradually become depleted, the Myanmar government has begun to restrict the mining and export of raw jade, which will inevitably lead to more and more people rushing to buy jade.

In September 2008, the Ministry of Finance of the Myanmar government announced that the annual production of jade was 32,000 tons. By October 2009, the Ministry of Finance of the Myanmar government announced that the annual production of jade had decreased to 25,000 tons, a decrease of 21.9%. By 2013, jade production had decreased by 10,439 tons compared with the previous year, and the Myanmar government has further tightened its control over jade mineral resources. At the same time, as countries such as Europe and the United States have also begun to enter the jade mining and trading market, jade raw materials are in even greater short supply. At the 2013 jadeite public auction, the final transaction price of a piece of jadeite rough stone increased by 18,500% compared with the starting price. The prices of some other jadeite rough stones also saw unexpected increases.

In 2014, the number of raw stones in the Myanmar jade public auction was only 7,454, a decrease of 27.6% from 10,300 in the previous year. In 2015, the number of raw jadeite stones in the Myanmar National Auction was 8,943, of which 335 were openly marked and 8,608 were concealed, a slight increase of 1,489 pieces compared to 2014. However, by 2016, the number of rough stones on the Myanmar public auction had dropped to 6,062, of which 5,896 were hidden bids and 166 were open bids. As of the end of the Myanmar public auction, 3,806 blind bids were completed, with a transaction rate of 64.55% and a transaction amount of 403 million euros (approximately 3 billion yuan). 67 bids were sold, with a transaction rate of 40% and a transaction amount of nearly 100 million euros (about 750 million yuan). The total transaction rate was 63.88%, and the total transaction amount was 530 million euros (about 3.75 billion yuan).

3. Analysis of Jade Market Demand

At the China Jewelry Industry Innovation Forum in June 2016, Yang Sisan, vice president of the China Jewelry Association, pointed out that in the next ten years, China's overall demand for jewelry will grow at a rate of 15%-30%, and the future market potential is huge. ”

1. Analysis of Jade Consumer Groups

Jade, as a combination of oriental jade and western jewelry, is suitable for people of all ages. Based on age structure and economic strength, jade consumers can be divided into the following categories.

The first category is young consumers around 20 years old. In the past, because the styles of jade were relatively simple, it was mainly favored by middle-aged and elderly people. In recent years, with the continuous increase of jade fashion elements, especially the popularity of some inlaid jade jewelry, it has attracted the attention of more and more young consumers.

The second category is the working class with a certain economic purchasing power. This group of people already have a stable source of income and most of them have established their own families. With their career and family stable, they can use their extra funds to purchase some mid-range jade jewelry.

The third category is professional collectors who are very interested in jadeite collection and have high financial strength. This group of people are the main consumers of collectible jadeite. They have high professional knowledge of jadeite and sufficient funds to purchase mid- to high-end jadeite collections.

At present, the development of the jade consumption market is mainly due to the emergence of young consumers, the stability of the working class, and the strength of professional jade investment collectors, maintaining a healthy and stable development.

From 2010 to 2015, the per capita disposable income of China's urban and rural residents continued to rise rapidly. As for the income of urban residents in China in 2015, it increased by 2,351 yuan compared with 2014, with a year-on-year growth rate of 8.15%; the per capita disposable income of rural residents in China was 11,422 yuan in 2015, an increase of 15.47% over 2014. The increase in residents’ purchasing power has brought tremendous power to the development of the jade market. In the past, purchasing jade was the “patent” of high-income people.

Per capita disposable income of Chinese residents from 2010 to 2015

The "2015-2020 China Jewelry Market Annual Survey and Development Trend Research Report" released by China Industry Information Network pointed out that the middle class and above will be the main force driving jade consumption in the next few years. The report predicts that the consumption of the middle class and above will increase exponentially from 2015 to 2020.

2. Analysis of Jade Consumption Demand

The formation and structural changes of the jewelry consumption market are closely related to the economic development of a region and the renewal of consumption concepts. The population structure and social and cultural environment also affect jewelry consumption concepts and jewelry consumption. Jade jewelry meets the psychological needs and emotional value demands of consumers. With the advent of the marriage boom, the demand for jade jewelry will continue to rise.

Since 2008, more than 10 million couples have registered for marriage every year across the country, a leap-forward increase compared with the previous 10 years, and the number of marriages has maintained a steady growth. The consumer expenditure generated by marriage is as high as 250 billion yuan, and the consumption of wedding jewelry alone has reached 30-50 billion yuan.

From the perspective of population structure, babies born during the baby boom in the mid-1980s will gradually enter marriageable age and a period of rapid growth in consumer purchasing power in the next 10 years. This population structure will bring sustained growth to jewelry consumption in the future. According to existing data, the current average per capita wedding consumption in my country has reached 2,820 yuan. According to traditional Chinese wedding customs, jewelry is a must-have item for weddings. If there are 13.02 million couples getting married every year, and if each couple spends 3,000 yuan on jewelry, the conservative estimate is that there will be about 49.06 billion yuan in jewelry consumption.

From 2009 to 2014, the sales scale of my country's jewelry industry showed an overall expansion trend. In 2014, my country's jewelry industry achieved sales revenue of 390.30 billion yuan, a year-on-year increase of 16.34%.

In terms of total assets, in 2014, the top three provinces and cities in terms of total assets in the jewelry industry were Guangdong Province, Zhejiang Province and Shanghai, accounting for 67.79%, 12.01% and 5.97% respectively. The total assets of the top ten provinces and cities accounted for 96.98% of the entire industry. Judging from the asset growth of the top ten provinces and cities in 2014, Tianjin had the fastest growth rate, with an increase of 50.07%.

From 2011 to 2014, the amount of finished products produced by China's jewelry and related products manufacturing industry continued to grow. From 2011 to 2014, the sales of finished jewelry increased by RMB 2.3113 million, a growth rate of 158.24%. This shows that the demand for jewelry in my country is increasing.

In recent years, the price of jade raw materials has also seen an astonishing increase. In 2016, the price of mountain materials reached 300,000 yuan per kilogram, which was 2-3 times higher than that in 2008. The price of one gram of seed material is 20,000 to 30,000 yuan, which is 10 times that of 2008. Data shows that in the public auction of rough jadeite in Naypyidaw, Myanmar last year, the rough jadeite with a reserve price of tens of thousands of yuan was sold at dozens of times the price. The limited mining at the place of origin and the increasing scarcity of raw materials have made jade collection very difficult to come by; with the continuous improvement of living standards, even the working class, which has a large and wide consumer group, has seen a significant increase in consumer demand for mid- and low-end jade.

From 2011 to 2015, the price of jade jewelry showed an overall upward trend. Although the price of jade jewelry fell slightly in 2015, it still increased by 50% compared with 2011.

Judging from the consumption trends in the jewelry market, we can also find that the demand for jade is constantly increasing. From 2010 to 2014, consumption in China's jewelry market continued to rise. By 2014, the consumption of jewelry had reached 542.8 billion yuan, accounting for 18.8% of the disposable income of urban residents in my country.

From 2011 to 2015, the output value of jade jewelry in my country has shown a continuous upward trend, indicating that the demand for jade jewelry is increasing; but the growth rate of the output value of jade jewelry has dropped significantly, indicating that my country's jade jewelry market is tending towards a state of supply exceeding demand.

According to the statistics and forecasts of the "2015-2020 China Jewelry Market Annual Research and Development Trend Research Report" released by China Industry Information Network, the sales revenue of China's jewelry manufacturing industry will continue to grow from 2014 to 2020.

The "2015-2020 China Jewelry Market Annual Survey and Development Trend Research Report" released by China Industry Information Network pointed out that the total profit of the jewelry manufacturing industry reached 8.8 billion yuan in 2013. With the further growth of the consumption structure, we expect the total profit to reach 10.9 billion yuan by 2020, an increase of 2.1 billion yuan compared to 2013. This shows that jewelry products have huge potential market development space.

The development of the domestic market and the prosperity of the international trade market have driven the rapid development of the jewelry and jade jewelry industry. Strong domestic demand has provided a strong impetus for the development of the jewelry and jade jewellery industry. Relying on the prosperity of the jewelry industry and market demand, jade products will also become the main purchase object of consumers.

4. Analysis of the Collection Value of Jadeite

1. Jade’s value preservation and appreciation function

With the development of China's economy, a large number of high-income people have investment needs and demand for upgraded gifts. Jade has become an indispensable part of contemporary people's pursuit of material life because of its unique value of preserving and appreciating value.

According to statistics, in the early 1990s, housing prices in most cities were around 1,000 yuan per square meter and have risen to around 8,000 yuan per square meter now, a 6-8-fold increase; the price of gold has risen from around 300-500 US dollars per ounce to around 1,700-1,900 US dollars per ounce now, more than 5-fold; and the price of ordinary jade pendants has risen from three or five yuan to three to five hundred or even a thousand yuan now, more than 100-fold. It can be seen that the appreciation function of jade is dozens or even hundreds of times that of real estate and gold, and compared with the abnormal rise of real estate and gold, the investment risk of jade is much smaller.

Over the past 30 years, jade has appreciated by an average of 30% to 50% each year, with some special quality jadeite appreciating even more. Therefore, under strong inflation expectations, it is very suitable for long-term investment. Currently, more and more investors are turning their attention to investment and collection of jadeite, which has greater potential for value preservation and appreciation.

2. Rich Jade Culture

Marketing guru Philip Kotler believes that "cultural factors are the most basic factors affecting purchasing decisions." With the continuous expansion and deepening of cultural exchanges between China and the West, not only are more and more Western classical arts accepted and recognized by the Chinese people, but the Chinese jade culture, which has accumulated thousands of years of splendid beauty, is also increasingly showing its profound and unique charm. While arousing the love and attention of the Chinese people, it has also won increasingly wide praise and recognition around the world.

First of all, since jade has the traditional Chinese function of conveying moral truths, the shapes and patterns of its products reflect the best wishes of the Chinese people and are the concrete embodiment of China's blessing culture. For this reason, jade products are suitable for men, women, young and old, regardless of their occupations, and are ideal accessories and collections that can be accepted by everyone.

Secondly, the color of jade is mainly green. When worn on the yellow skin of Oriental people, it forms a set of contrasting colors. If it is inlaid with yellow precious metals, it can achieve aesthetic perfection. Jade is a kind of jewelry that is more suitable for Oriental people with yellow skin than diamond.

Finally, due to the differences between Western gem culture and Eastern jade culture, jade occupies half of the Chinese jewelry market. Jade has a gentle texture, which is in line with China's ancient Confucianism, Buddhism and Taoism theories. Although it cannot be completely moderate, it must not be too sharp. It can also be said that implicit beauty is the tradition and virtue of our ancient oriental nation. As the ancients said, "A modest gentleman is as gentle as jade." Therefore, jadeite, which represents the implicit and restrained traditional oriental culture, is more suitable for Chinese people to wear.

China has had the custom of appreciating, worshipping and collecting jade since ancient times. Jade items with auspicious and evil-repelling properties are applied to figures, animals, flowers, birds, and some texts. Folk legends and myths are also used as themes. With the help of metaphors, similes, puns, symbols, homophones and other expressive techniques, a pattern is formed, which is given auspicious meaning. Auspicious language is used to express the inner feelings, and people's pursuit of happiness, longevity, joy and peace are placed on their beautiful wishes. Confucius, the most holy teacher, endowed jade with the "five virtues" to represent the beauty of humanity, and attached the warm and smooth stone to represent the highest state of being a human being. The Chinese nation's custom of using and worshipping jade is one of the driving forces behind the continued development of the jade market.

3. Jade has health-preserving effects

Today's urban life is stressful and fast-paced, especially the busy work causes many people to have health problems, so health preservation has gradually become one of the focus of people's lives. Jade is loved by more investors because of its advantages of combining collection and health preservation.

As the saying goes: A person takes care of jade for three years, and jade takes care of the person for a lifetime. The ancients believed that jade was the essence of heaven and earth and was the best at storing "qi". Modern science believes that the trace elements in jade are beneficial to human health. Jade is very rich in minerals and beneficial trace elements. If worn for a long time, it can be absorbed by the human body. The photoelectricity generated by jade can also dredge the meridians and regulate physiological functions. Long-term wearing can not only please the body and mind, but also has a certain effect on health.

In other words, the chemical components in jade can compensate for the human body, which is beneficial to enhance immunity, improve metabolic function, thereby improving physical and mental health, and playing a preventive and strengthening role. Its mechanism is similar to that of popular magnetic therapy tablets, health watches, fitness balls, etc.

Observations have shown that if the jade pendant is placed on the chest meridian points, close to the "Dragon Chin" and "Shenfu" acupoints, the phenomenon of guiding the reaction points on the body surface and the sensation transmitted along the meridians will be particularly ideal. Because acupoints are the places where qi and blood from the body's internal organs and meridians are infused into the body surface, they have both disease prevention and treatment functions. In acupuncture, "Longhan" and "Shenfu" are the main acupoints for preventing and treating chest tightness, heart pain, stomach problems (stomach cold, vomiting, cramps, ulcer pain, etc.). Similarly, if the jade bracelet is close to the "Neiguan", "Shenmen", "Tongli" and "Gaogu" acupoints, it will have a calming effect on calming the mind, relaxing the muscles and activating the blood circulation; the jade stirrup ring on the middle finger "Zhongkui", "Duanzheng" and "Zhongping" acupoints will help to improve the digestive system, prevent and treat malnutrition, choking, nausea, vomiting, etc.

Summarize:

Nowadays, due to the decrease in jade production and the increase in demand, the value of jade is constantly rising, and the increase is far higher than the prices of gold and real estate that many investors are optimistic about. Moreover, jade has a rich cultural heritage and health-preserving functions, which can satisfy people's pursuit of beauty and health. Jade products have huge potential for value preservation and appreciation, and the investment risk is relatively small, so they can be a good choice for investors in a sluggish market.

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