CHINA'S imports and exports of diamonds jumped 78 percent to US$2.2 billion in the first 10 months of this year on strong economic growth and domestic demand.

The value is expected to rise to US$2.5 billion this year, said Yan Nanhai, vice president of the Shanghai Diamond Exchange, China's sole diamond bourse, yesterday.

Emerging markets, including China and India, are leading global demand for diamonds this year as the industry rides out of the global financial crisis.

China is trailing the United States as the world's second biggest market for diamonds after overtaking Japan in 2009.

China cut the value-added tax on imported polished diamonds from 17 percent to 4 percent from July 1, 2006, while the VAT is not imposed on imported rough diamonds. Since 2002, Customs duty has been waived on rough and polished stones traded on the exchange.

Shanghai aims to be a diamond hub in Asia by boosting sales, exhibitions and professional training. The two-day China Diamond Conference will be held in Shanghai from November 30.