China has become a burgeoning market for large, expensive diamonds, as its number of millionaires and billionaires is on the rise.

Jeweler Laurence Graff, head of Graff Diamonds--which supplies large and rare diamonds and jewels to the world’s wealthiest--is moving into China and focusing on dealing in larger, rougher stones. 

Graff, a billionaire himself, is also a cononsseur of pricey diamonds, having paid $46 million at a Swiss auction for a pink diamond in 2010. His most noteworthy transactions include the sale of a 244-carat and 78-carat diamond. Graff owns part of a diamond mining company and has a large stake in a corporation that polishes and cuts diamonds. His clients have included mega stars Arnold Schwarzenegger, Victoria Beckham, Oprah Winfrey, and opulent personalities such as the sultan of Brunei and Imelda Marcos.

Chinese buyers are beginning to corner the marketplace on the largest and priciest diamonds on the market.

“Americans are not attracted in the same way in spending money on jewelry as in the Far East,” says Graff, who also claims that although Hollywood celebrities are often seen wearing large pricey gems, the jewelry is usually borrowed for publicity purposes because actors do not have the money to purchase such items.

Graff plans to open a new store in China, and one in Taiwan. The American diamond market, on the other hand, has slowed as a result of the economic recession in the United States. 2008 and 2009 were particularly bad years; even the ultra wealthy curbed their jewelry spending. 

 “If you had told me five years ago that the biggest buyers would come from the People’s Republic of China, we would have laughed,” says a Gradd Diamonds executive. "America used to be the No. 1 market. Now that is being challenged.”

Many high end jewelry firms are pursuing the Chinese market.  Tiffany & Company has fifteen stores in China and DeBeers will be opening three more this year, bringing its total to five.

 “...When people worry that their dollars are worth nothing, they want assets that will increase in value, silent assets that you can put in your pocket because tomorrow, anything can go wrong,” says Graff.

 According to a diamond industry insider, the ultra wealthy opt for large diamonds as a means of keeping some of their wealth in an easily transportable and non-traceable form.