The Shanghai Diamond Exchange (SDE) and the Diamond Federation of Hong Kong (DFHK) have signed a cooperation agreement to develop China's diamond industry, the two organizations announced last week.

The new agreement calls for the SDE and the DFHK to share resources and information that will provide services for members of both organizations and help them maximize their diamond trading activities; develop and implement a business promotion plan and organize an international jewelry exhibition to be held under the auspices of the SDE and the DFHK; hold regular management meetings; and work out a strategic plan that will bring the volume of general trade to over $800 million by the end of 2011.

In addition, the DFHK plans to continue seeking government support to secure Hong Kong's role as the major diamond center in Asia.

Even prior to this agreement, the diamond industries in Shanghai and Hong Kong worked together closely. Figures published by the SDE indicated that in 2010, Hong Kong exported $5.57 billion worth of polished diamonds to Shanghai, accounting for 43% of the SDE's total imports.

In 2010, Hong Kong imported and exported $23.5 billion worth of polished diamonds, a 349% increase over 2002, and imported and exported $22.7 billion worth of rough diamonds – a 47% increase since 2002. The total amount of the diamond trade between Hong Kong and mainland China increased 374% between 2002 and 2010.