Jadeite jewelry is displayed on July 11 at the Shanxi World Trade Center in Taiyuan, capital city of North China's Shanxi Province. Photo: CFP

He flew thousands of miles to Guang­zhou, capital city of South China's Guangdong Province on June 10 to see his "secret lover."

Dong Hang, a man in his 30s from Taiyuan, North China's Shanxi Province, has made numerous such trips during the last decade.

His "lover" is not a hot lady but a cold stone he bought together with nine other people for 1.5 million yuan ($234,580) last year at a Myanmar gem public auction.

After examining 15 glamorous jadeite bracelets carved from the stone with a flashlight in his jade wholesale shop in Guang­zhou, Dong said he felt finally relieved.

"The moment I saw these bracelets, I knew I could not lose out on this deal. From this one stone, 70 to 100 bracelets can be made," Dong said.

Dong has been a jadeite dealer since he was a teenager, learning to gamble on the raw jadeite stone, carving and selling jade­ite jewelry and ornaments from his 90-year-old Thai tutor. Dong owns a jadeite retail shop in Taiyuan and a wholesale store in Guangdong.

Dong loves the trade and jokes that each jadeite stone he buys or "gambles on" is his lover. Gambling on stone is the core of the jadeite trade: The raw stone is usually covered in a layer of weathering and traders bid for a raw stone at a certain price without knowing whether the stone could turn out to be jadeite of a high quality. The truth is only revealed after the stone is cut on the spot at the bidding.

The price of the stone can soar hundreds of times if it is found to be of high quality. The final product made from the raw stone can also affect the yield of the stone.

"A gambling stone usually has several investors whom we call 'share­holders.' They jointly bid for a stone to spread the risk," Dong said.

"Credit counts for something in this old trade. A trader who has little experience and a bad reputation won't be allowed to become a co-share­holder," he said.

Dong could not remember how many stones he had gambled on since he was in the trade and said he rarely loses. His largest bet on a stone was 20 million yuan that he made at a Myanmar gem public auction.

He has attended Myanmar gem public auction, the largest gem auction in the world, almost every year since 1997 to buy jadeite, but he chose not to attend the latest after signs of declining sales began last Septem­ber.

"The market is getting cooler and I feel less calm when it comes to cutting and carving the stone that I bought," he said.

Cooling market

About 5,300 gem traders includ­ing 2,100 from abroad attended the latest Myanmar public gem auction in March, down 60 percent from the same period last year, according to statistics from Foshan Nanhai Ping Zhou Jewelry & Jade Association in Guangdong Province.

Sales at the auction were $702.66 million, a sharp drop from the last annual event in March 2011 when it gained $2.8 billion, the Xinhua News Agency reported.

Myanmar is one of the largest gem producers in the world, accounting for almost 90 percent of world production and jade of the highest quality can only be found there.

The Myanmar gem auction fair was first launched in 1964 and starting 2004, it became a tri-annual event, where jade or gem lots were sold through tender or competitive bidding.

Only jadeite traded at the auction fair could be exported overseas and 90 percent was said to have come to China, where wearing jadeite is believed to bring good luck. Therefore, trading at the fair is usually seen as the barometer of China's jadeite market.

Due to sluggish demand from traders, Myanmar's July auction was called off. Guangdong, the largest gem wholesale market and fabrication center in China, has seen declin­ing sales since late 2011, and many jadeite shops closed down, said Dong Zhiqiang, director of the general office at Guangdong Gems & Jewelry Trade Association.

In Beijing, one of the top gem retail markets in China, sales have also dropped and dealers are also exiting the market.

Gao Fulin, owner of a gem store on the well-known jade street of Xisi Nan­dajie, said business has been sluggish since the beginning of the year.

On the wooden cabinet in his 20-square-meter shop were more than 50 black and brown stones of various sizes. Some have an opening cut on the surface to reveal the texture of the stone.

Gao sells both raw stones and jade­ite jewelry. He said in the past he could always share the joy with buyers as their bets paid off on raw stone almost daily.

"But now the only good news was late last month when a man bought a raw stone at 100 yuan to carve a locust ornament for his wife. The stone could be instantly sold at 2,000 yuan after it was cut open," he said.

"People gambling on stones are growing fewer. Many dealers are leav­ing the street," he said.

"China's economy is slowing down, affecting down stream retail sales, which will in turn affect the upstream including sales of raw stone and wholesale jadeite products," Dong told the Global Times.

"The Myanmar government began restricting jadeite mining in 2010 and banned it totally in June, affecting sup­ply," he said.

Crazy stone

Beijing resident Guo Li, 32, bought a jadeite bracelet six years ago for his then-fiancée at 1,000 yuan as a wed­ding gift.

"My wife's family nagged her at that time about how mean I was as to spend so little on her, but they all shut up after the price of a bracelet of the same quality rose to 10,000 yuan," he said.

Jadeite prices soared too fast in the last decade, said Hao Jinzhu, vice president of Chongqing Association of Collectors, "especially in 2009 and 2010 when the economy was boom­ing, as the saying goes, 'invest in gold in turbulent times and invest in jade jewelry in boom times.'"

The price of jadeite rose 18 percent on average between 2000 and 2009 and surged 30 percent in 2010, data from China Gems & Jewelry Trade As­sociation shows.

"Given the sluggish stock market and the government policy to restrict property prices since 2009, many speculative investors including Shanxi coal bosses as well as Wenzhou mer­chants who used to be in the garment and shoe industry have entered the gem market, pushing up prices," Hao said.

"But when the economy slowed down and inflation dropped, these speculative investors withdrew from the market. The bubble burst and prices are rationalizing," she noted.

According to Hao, despite the mar­ket decline, the prices for top grade jadeite will hold firm and won't drop since the raw stone is a non-renewable resource.

"I have never lost confidence in the trade despite the current weak mar­ket," Dong, the dealer, said.

"The industry is reshuffling and it's not necessarily a bad thing. After all, speculators will be gone and those who remain are the true gem lovers like us," he said.