Jade Bubble in China
The Hot Money is leaving the China Jade market
The Jade bubble in Southwest China’s Yunnan province is bursting after more than a decade as Hot Money is leaving.
According to traditional Chinese culture, Jade brings Happiness and Luck to its owners and keeps Evil away.
Over the past 10 yrs, Jade accessories and ornaments sold very well and some items were scarce. But starting from the beginning of 2012, the prices of low and middle-grade jade products dropped 20 to 30%, the prices of high-grade Jade are steady.
“The current lackluster jade market is a reflection of the slowing Chinese economic growth and the world’s as well”, said Li Lianju, deputy director of the department of land and resources of the Yunnan provincial government.
“It’s normal that the Jade market is starting to adjust and becoming rational after a frenzy that lasted years”, he added.
“Starting in Y 2005, Jade prices soared. Emerald prices increased almost 500% from Y 2005 to 2011. The trade volume for Jade in Yunnan has jumped from less than 20-B Yuan (US$3.17-B) in Y 2005 to over 30-B Yuan in Y 2011,” Li Lianju said.
The price surge attracted Hot Money from across the country. Yunnan’s Jade market accounts for 70% of the country’s total and is considered a Bellwether.
“A top-class emerald bracelet cost 100,000 yuan in 2005, but the price soared to 500,000 yuan in 2010. You can imagine how huge the bubble is”, Li Lianju said.
Many buyers and collectors believe that Jade is unique, according to the Chinese saying “Gold can have a price but not Jade, collect Jade instead of Gold”.
Li Lianju believes that prices will decrease about 10% a year in the coming 3 yrs.
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Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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