Locally-based diamond experts are convinced that China’s new-found obsession with diamonds, combined with a burgeoning middle class, are forcing up prices globally.

As Chinese consumers grow increasingly enamored with luxury goods, they are buying diamonds so quickly that it’s inflating the price of stones around the world.

Since 2000, it’s estimated that 230 million Chinese have moved into cities to work for wages, creating a massive middle class that aspires to own diamonds. As the demand grows for “affordable” stones, prices are being inflated under the rules of supply and demand.

While prices for 1-carat internally flawless “top white” diamonds have risen about 7 per cent in two years, according to PolishedPrices.com – an independent diamond information website – an SI stone of similar size and colour has increased by 24 per cent.

Australian diamond expert Garry Holloway, said: “the same thing happened when Japan entered the diamond market in the 1980s.” China surpassed Japan in 2011 to become the second largest diamond-buying nation, behind the US.

"Japan demanded, and got, better cut quality diamonds,” Holloway added. “This raised the price of better cut diamonds, which in turn became more readily available, but at a higher price.”

Diamond dealer Robin Sobel of Protea Diamonds agrees with Hollaway, saying the price has definitely increased recently. He says he is paying between 5-7 per cent more for some diamonds. He says mainly SI1 stones are very strong while VVS and VS1 stones are weaker due to Chinese purchasing power.

"The price has gone through the roof for these SI1 diamonds because they have become so scarce. I have clients waiting to purchase good quality stones and I can't find them. It's crazy," he said.

According to Anglo American Plc (AAL), owner of De Beers Buyers, China and the US accounted for about 20 per cent of global diamond demand in 2011 and that will rise to 28 per cent in 2016 as the market grows from US$23 billion to US$31 billion.

Initially, affluent Chinese would consider only purchasing the highest quality diamonds, but as the middle class has pushed into the diamond market, that requirement has disappeared. However, it appears there is still sufficient activity in the top end of the market to ensure prices remain high.

Financial news analyst Bloomberg reported that even as shoppers go down-market in China, the gap to VVS stones was still large. The report suggested that a flawless 1-carat “top white” round diamond would cost about US$28,800 from online retailer Blue Nile, while a typical middle-market SI1-category diamond of the same size and colour would cost about US$7,200.