China has gradually emerged from the impact of the pandemic. Facing an increasingly complex external macro environment, the recovery of economic vitality for various industries' overseas expansion remains a long-term process. Grabbing orders overseas and seeking new growth opportunities abroad have become new topics and challenges among lab-grown diamond and superhard material enterprises. To this end, Mr. Wang Zhidong, Secretary-General of the China region of the AIDI International Intelligent Diamond Association, shared his views:
As an international non-profit industry organization, the AIDI International Intelligent Diamond Association established an office in Beijing, China, in 2023. As a global advocate for sustainable development in the jewelry industry and an integrator of technology and service resources, we objectively share the global sustainable development challenges faced by Chinese lab-grown diamond enterprises in their overseas expansion that we have observed in the past two years.
Core Views
✅ Since 2023, multiple domestic and international macro factors have led to a slowdown in China's economic growth, a decline in consumption, and a gradually saturated domestic market. Overseas expansion has gradually become an inevitable choice for enterprises seeking new growth space. Over the past decades, China has maintained high growth in labor productivity, continuously improved economic quality, and possesses abundant supply chain and production capacity resources. In addition, the accumulation of a large number of professionals in specialized fields, manufacturing capacity, and large platform operation experience provide strong support for Chinese enterprises to go abroad.
✅ According to the public opinion monitoring results of the Industrial Market Committee of the AIDI International Intelligent Diamond Association, the industries currently with high enthusiasm for overseas expansion mainly include the internet, automobiles, new energy, and manufacturing. In addition, some leaders have emerged in technology, gaming, and biopharmaceutical fields. Of course, the lab-grown diamond and superhard material industries, which aggregate 70% of the global production capacity, are also among them. Especially the global lab-grown diamond jewelry consumer markets, mainly concentrated in the United States, Canada, and Australia, are the primary markets for China's lab-grown diamond industry to expand overseas.
✅ To enter the global market, we must play by the rules of the global market.
In the lab-grown diamond and superhard material industries, China faces the need to enter developed markets such as the United States, Europe, Australia, and Japan, which also means facing direct competition from countries like India. In addition to traditional aspects such as quality, price, and service, overseas enterprises need to strengthen their sustainable development capabilities (ESG) to enhance competitiveness and gain global market recognition. Otherwise, they will lose their competitive foothold in overseas markets!
✅ Since 2022, various overseas industry markets, especially the United States and the European Union, have accelerated ESG regulation, and financial institutions providing financing are increasingly focusing on corporate sustainable development performance. Based on considerations of environmental differences faced in overseas operations and analysis of the ESG performance scores of sub-topics in popular overseas industries, the AIDI International Intelligent Diamond Association believes that China's lab-grown diamond industry needs to focus on ESG topics such as carbon emission reduction, employee engagement and diversity, supplier management, privacy data security, and responsible marketing when expanding overseas.
✅ In terms of carbon emission reduction, Chinese lab-grown diamond and superhard material overseas enterprises face increasingly stringent overseas carbon emission disclosure requirements (especially listed companies) and the introduction of management regulations by the European Union and the United States to address the carbon emissions of imported goods. The insufficient disclosure rate of climate information and China's current lower carbon price compared to Europe may put overseas enterprises at a disadvantage.
✅ Overseas regulatory agencies and labor populations have higher participation and attention to employee treatment, diversity, and corporate management behavior. Overseas enterprises need to consider employees as more important stakeholders, introduce more comprehensive employee protection and diversity policies, to avoid unforeseen conflicts leading to production interruptions, becoming a financial risk for the enterprise.
✅ In 2021, China successively passed the Data Security Law and the Personal Information Protection Law, covering multiple dimensions in information and privacy protection. However, the EU's GDPR additionally includes the topic of Privacy by Design. In this regard, Chinese overseas enterprises need to incorporate privacy protection considerations throughout the entire process of product and online platform development.
✅ Some popular overseas industries, such as the lab-grown diamond and superhard material industries, have an average supplier and production capacity concentration higher than 40%. Overseas expansion requires enterprises to layout a more diversified supply chain and strengthen local employment and production traceability. In addition, negative events and public opinions of supply chain enterprises in environmental and social aspects are affecting the "ESG files" of Chinese enterprises themselves. Once an overseas enterprise has an ESG credit stain, the cost of enterprise correction is very high!
✅ Overseas regulatory agencies and consumer groups, industry associations, etc., are increasing their vigilance against enterprises exaggerating sustainable development performance. We recommend that Chinese overseas enterprises, especially lab-grown diamond and lab-grown gemstone enterprises, set internal ESG capacity building as a higher priority, and maintain caution in publicly promoting sustainable initiatives and achievements. In addition, in the marketing of sustainable topics, enterprises should also consider differences in understanding and attention to various sustainable topics in different markets to achieve better marketing effects. Previously, the Indian lab-grown diamond jeweler Kalamandir Jeweller was accused by the NDC Natural Diamond Council, which is a case that needs to serve as a warning to China's lab-grown diamond industry!
The year 2025 is a year of dramatic changes in the global economy and politics. For the global lab-grown diamond and lab-grown gemstone industries that the AIDI International Intelligent Diamond Association focuses on, we uphold the industry philosophy of advocating and promoting sustainable development, and assist China's lab-grown diamond, lab-grown gemstone, and other industries to achieve high-quality overseas expansion in terms of industrial market, financial and legal affairs, supply chain, brand promotion, and other aspects!