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The city of Changle in Shandong Province is today home to 2,000 companies involved in the gemstone business.


The Gem City of China houses many of the companies involved in Changle's sapphire trade.

  Small county in China's Shandong Province enjoying boom due to sapphire business


February 12, 2012


A small county in China's eastern Shandong Province is home to a growing number of millionaires, made rich by a rapidly growing sapphire production center and trade that have developed nearby what is one of the world's more significant sapphire producing areas.

Called Changle, the county is located about a three hours drive from Shandong's capital city of Jinan. Its sapphire mining area covers an area of 450 square kilometers, and reportedly contains hundreds of millions of carats in unprocessed gemstones. The sapphires, which are hosted in basalt rock, exhibit a range of colors, including dark blue, blue, greenish blue and yellow. The most common trace elements are iron, gallium, titanium, cobalt and vanadium.

Mining in the region has been for the most haphazard, and carried out by mainly independent concerns. To restore a modicum of control, the local government began placing restrictions on exploration from 2008 and banned any form of mechanized mining in 2010. This has reduced production and caused the price of sapphires to skyrocket.

Rising prices have generated a good deal of wealth in the local gem trade. A one-carat stone that would have sold for less than 100 yuan 10 years ago, today sells for as much as 5,000 yuan.

Speaking to China Daily, Zhou Weixia described how she left her job as a bank clerk to become a sapphire trader with her husband. "I paid 20,000 yuan ($3,175) in 2007 for a 24-carat sapphire and I refused to sell it when someone offered 400,000 yuan just a few days ago," she said. "It's very hard to find such a fine star-sapphire now. The price will stay high. I won't take less than 700,000 yuan."

The local government has also introduced a range of programs that are designed to boost the region's revenues from the gemstone business. These include startup funds, financial services and tax discounts for organizations involved in the gemstone and jewelry sector.

More than 2,000 companies in Changle country are involved in sapphire manufacturing, processing and trading, and according to official data currently produce a total of 13 million carats annually, bringing in 36 billion yuan. Many are housed in the Gem City of China, a gemstone processing and trading center. It has attracted more than 200 leading jewelry companies from Beijing, Shanghai, Shenzhen, and Hong Kong. Future plans involve the development of a 2.6 million square meters jewelry manufacturing and processing center with an annual turnover of 100 billion yuan by 2015.

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