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Jade craze takes hold
Skyrocketing prices for the gem draw speculators into the market in search of instant wealth, Wei Tian reports in Urumqi.
For thousands of years, no gem in China has been given the same status and honor as jade. It was used to make imperial seals in ancient times, carved into ornaments in the shape of gods or mythical wild animals to protect the wearer from misfortune, and more recently embedded into the gold medals for the Beijing Olympic Games in 2008.
Over the past decade, however, the gem has also become extremely popular with collectors, not for its representation of moderation and virtue, but for its skyrocketing price.
Jade dealer Wang Wenhua said that 10 years ago a natural stone would have sold for about 10,000 yuan a kilogram (more than $1,500 at today's exchange rate).
Today, that price would be at least 1 million yuan.
What Wang Wenhua regrets most is having let go of some precious jade too early and too easily. She is 35 and has been a jade dealer since 1997.
"Most items in my collections sold in the early years for several hundred yuan, a thousand at most for the really good ones. It was still a decent price at that time, but who would have thought what would happen next?" Wang said.
She explained that Hotan jade is found in two forms, shanliao (nephrite), which is found in caves, and ziliao (pebble), which is burnished up to a thousand years in a river.
There is no list price for jade, Wang said, but 10 years ago a universally acceptable price for fine primary nephrite --the natural stone -- would have been about 10,000 yuan a kilogram. Today, the price would be at least 1 million yuan ($157,000).
In the same 10 years, the global price of gold has only tripled.
"For jade pebbles that are engraved by nature, you can hardly put a price on them now," Wang said. "It's all up to how much the buyers want to pay."
It was reported that a decorative jade cabbage that was produced in Yangzhou and exhibited at the 2010 Shanghai Expo was bought by an anonymous French couple for 130 million yuan. Yangzhou Jade Workshop later denied the report, explaining that the item was a national treasure and thus not for sale, but the story is still widespread.
To compensate for her regrets and to seek another opportunity to make a fortune, Wang now travels three or four times a year from her home in Urumqi, capital of Northwest China's Xinjiang Uygur autonomous region, to the birthplace of jade a thousand miles away.
Her destination is Hotan, a remote city on the western end of China's territory where a riverbed emerges every spring as the snow melts, carrying jade pebbles down from the Kunlun Mountains.
The river, known as the Yurungkash or White Jade, is the headwater of Hotan's jade industry and has made the city a mecca for Wang and other dealers, collectors and speculators.
The prospectors who flocked to Hotan showed no reverence for something long considered sacred.
"The situation was most serious in 2006, when there were more than 8,000 excavating machines and 50,000 people digging along the 30-km-long riverbed day and night," Wang said.
"People would invest hundreds of thousands of yuan buying machines and hiring workers, but all the effort would pay off once they found a sizable jade pebble."
A small village sprang up along the river, with hundreds of tents and cook shops scattered around the digging site. Their garbage piled up, and their excavations reshaped the river, causing flood hazards
.
The frenzy was stopped in 2007 when the local government dispersed the illegal residents and banned any more mechanized exploration on the riverbank to prevent further environmental damage.
"But the restriction has only made the price of jade increase even faster, because it significantly reduced production and pushed the scarcity value of the existing pieces even higher," Wang said.
"There will always be supply, only the digging now goes underground. Even with helicopters patrolling the area, some people still find a way to get access, under cover of river dredging projects, for instance."
The value of a jade pebble of acceptable quality can triple even before it is shipped out of Hotan, Wang said.
"Top-quality Hotan jade is always bought directly by collectors from Beijing or Shanghai, or goes into the hands of jade-carving masters in Yangzhou," Wang said.
"Only the next-best pieces are carved locally and are for us local dealers."
But even when the second-best jade arrives at one of Wang's three fancy stores in Urumqi, a pebble the size of a 1-yuan coin comes with at least a five-figure price.
"Believe it or not, very few of them are now negotiable in price. People who want to buy top-grade pieces do not care about the prices at all," Wang said.
For many dealers like Wang, the real problem is to provide quality products to meet the demand. Very little good jade returns to circulation once sold, because people keep their collections off the market while prices are rising.
"Earlier this year, a businessman from Wenzhou brought 30 million yuan with him, hoping he could buy some masterpieces, but he returned disappointed," Wang said.
Wang has even contacted old customers to try to buy back their pieces, usually offering a 20-percent premium on the original price, but has found few takers. That is understandable, given that even showing off your jade has become risky.
"The rules are, if someone is holding your jade and intends to appropriate it for himself, he can ask you to name a price and then pay for it," said Wei Dongyun, an experienced jade collector.
On other occasions, Hotan jade is purchased for a purpose. "Our products are mostly brought by businessmen as gifts for their friends or business partners," said Tong Xiaoyan, a jade saleswoman at Tianshan Department Store in one of Urumqi's most luxurious shopping malls.
"No ordinary person would buy a jade article that costs a year's salary."
Tong used to work at a counter that sells diamonds, but applied to move to the jade counter "simply because the Hotan jade is much more expensive, and is a good way to make more commission."
"The genuine Hotan jades are already unaffordable for regular customers," she said. "If you have bought a nice-looking piece for just several hundred yuan, there is a great chance that you were cheated (that the jade was imported)."
Xinjiang, as a popular tourist destination, attracts millions of people who would like to take home several jade articles as souvenirs. But their budgets, maybe just several thousand yuan, are trifling to the sellers.
A gap between the surging prices of Hotan jade and growing demand at the low end has boosted imports from overseas.
"The volume of imported jade is enough to make every Chinese a jade wearer," said Li Yanjun, deputy head of art appraisal at the Ministry of Culture. "The majority of imports are from Russia or South Korea."
Total jade production in Hotan five years ago was about 10 tons. Jade imports from Russia alone exceeded 500 tons. A growing supply from abroad will bring down prices in low end market, Li said. Korean jade sells for just 800 yuan a kilogram.
Although Hotan jade could maintain its value, it is hard for ordinary eyes to distinguish between the genuine article and its imported imposter. Some forgers even paint color on jade to give it a weatherworn look and sell it as a precious pebble.
There is an old saying that "you can put a price on gold, but not one on jade." Some say it means that jade is priceless; others suggest it is valueless because jade is not traded on a public market like gold or other metals.
Another saying, that "one should collect gold in troubled times, but jade in a flourishing age," applies to the huge price increase for Hotan jade in China's economic boom and period of excess liquidity.
Qiu Zhili, a professor in the Gem Testing and Research (Appraisal) Center at Sun Yat-Sen University in Guangzhou, offered another reason for the price increase.
"We used to evaluate the price of jade just by its material value, while neglecting its social and environmental costs," such as the rising price of labor and stricter environmental protections.
But Qiu said that little room remains for further appreciation because the price has already put the market out of the mainstream and supply remains robust.
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