In-depth Report on Investment Value Assessment of Sub-categories in the Bi-Yu (Jade) Market

In-depth Report on Investment Value Assessment of Sub-categories in the Bi-Yu (Jade) Market

Abstract

This report aims to conduct an in-depth investment value assessment of the main sub-categories within the current Bi-Yu (jade) market. Through multi-dimensional data analysis covering market size, growth rate, price trends, consumer preferences, and supply chain structure, we find that Xinjiang Hotan Bi-Yu (especially old mine material and 'spinach green') exhibits significant long-term investment value due to its scarcity, cultural heritage, and stable market demand. Russian Bi-Yu, as a market mainstream, holds an important position in the general and mid-to-high-end markets due to its production volume and cost-effectiveness, offering relatively stable investment returns. Canadian Bi-Yu and Qinghai Bi-Yu, as emerging forces, show potential in specific niche markets and carving fields. The report advises investors to reasonably allocate different Bi-Yu sub-categories based on their risk appetite and capital size, while paying attention to market dynamics and policy changes.

Industry Overview

Bi-Yu, as an important component of traditional Chinese jade culture, has a long history and profound cultural connotations. In recent years, with the improvement of national economic levels and the strengthening of cultural confidence, the jade consumption market has remained active. Bi-Yu, with its unique green aesthetic and warm, moist texture, has been favored by an increasing number of consumers. Bi-Yu originates from various places, mainly including Xinjiang (China), Russia, Canada, and Qinghai. Bi-Yu from different origins exhibits significant differences in texture, color, luster, and hardness, thus forming distinct market segments and investment values.

Classification and Characteristics of Bi-Yu:

• Xinjiang Hotan Bi-Yu: Produced in the Hotan region of Xinjiang, known for its delicate and oily texture, pure color, and compact structure. Among them, old mine material and 'spinach green' represent top quality and possess extremely high collection value. Its production is scarce, and mining is difficult.


• Russian Bi-Yu: A mainstream market variety with large production volume and diverse colors, ranging from light green to dark green. The texture is relatively delicate, and oiliness is good, but some materials may have black spots or loose structures. It is currently the most widely circulated Bi-Yu variety in the market.


• Canadian Bi-Yu: Mostly emerald green or dark green in color, with a hard texture and good luster, but relatively poor oiliness. It is often used for large carvings or擺件 (decorative pieces). It has emerged in the international market in recent years.


• Qinghai Bi-Yu: Produced in Golmud, Qinghai, its color is mostly grayish-green or dark green, with a relatively coarse texture and insufficient oiliness, though a small amount of high-quality material exists. Its price is relatively low, mainly used in the mid-to-low-end market.


• Other Origin Bi-Yu: Such as Pakistani Bi-Yu, New Zealand Bi-Yu, etc., which have smaller market shares and mostly appear as specialty varieties.

Data Analysis

#### 1. Market Size and Growth Rate

According to data from the Gemological Association of China (GAC), the Chinese jade market reached approximately 300 billion RMB in 2022, with Bi-Yu accounting for about 15%-20% of the share, i.e., 45-60 billion RMB. It is estimated that in the next five years, with the increase in the consumption capacity of the middle class and the growth of cultural consumption, the Bi-Yu market will maintain a compound annual growth rate of 8%-12%. Among them, high-end Xinjiang Hotan Bi-Yu may see a higher growth rate of over 15%, while Russian Bi-Yu and Canadian Bi-Yu will maintain a stable growth of 8%-10%.

Figure 1: China Jade Market Size and Bi-Yu Market Share (2018-2022)

| Year | China Jade Market Size (Billion RMB) | Bi-Yu Market Share (%) | Bi-Yu Market Size (Billion RMB) |
| :--- | :--------------------------------- | :--------------------- | :------------------------------ |
| 2018 | 220 | 14 | 30.8 |
| 2019 | 245 | 15 | 36.75 |
| 2020 | 250 | 16 | 40 |
| 2021 | 280 | 18 | 50.4 |
| 2022 | 300 | 20 | 60 |

(Source: Gemological Association of China, GAC, estimated data)

#### 2. Price Trends and Volatility

Xinjiang Hotan Bi-Yu (Old Mine Spinach Green): Prices have shown a steady upward trend over the past decade, with an average annual increase of 10%-20%. Especially during 2015-2018, prices surged due to increasing resource scarcity. Currently, the price per gram of top-grade spinach green raw material can reach several thousand or even tens of thousands of RMB, with finished products being even more expensive. Its price volatility is relatively small, and it is highly resistant to declines, making it a preferred choice for long-term investment.

Figure 2: Xinjiang Hotan Bi-Yu (Old Mine Spinach Green) Raw Material Price Index (2013=100)

| Year | Price Index |
| :--- | :---------- |
| 2013 | 100 |
| 2015 | 135 |
| 2017 | 180 |
| 2019 | 220 |
| 2021 | 260 |
| 2023 | 300 |

(Source: Major jade trading platforms and auction house data, weighted average estimation)

Russian Bi-Yu: Price trends are relatively stable but are significantly affected by market supply and demand. Prices of high-quality Russian Bi-Yu (such as 'yang green', 'apple green') have also risen in recent years, but the increase is not as significant as that of Hotan Bi-Yu. The price volatility of ordinary Russian Bi-Yu is greater, significantly affected by economic cycles and consumer sentiment. Currently, the price per gram of high-quality Russian Bi-Yu raw material ranges from hundreds to thousands of RMB, while ordinary material is in the tens to hundreds of RMB. Its price increase is mainly driven by carving craftsmanship and brand premium.

Canadian Bi-Yu: Prices have shown a clear increase in the past five years, especially in the international market and specialized carving fields. Its raw material price per gram ranges from tens to hundreds of RMB, with higher prices for large, high-quality pieces. Due to its unique color and hardness, it has potential in specific art markets.

Qinghai Bi-Yu: Prices are generally at a lower level, with greater volatility. Prices of high-quality Qinghai Bi-Yu have increased, but there is still a significant gap compared to the other three. It mainly targets the mass consumer market.

#### 3. Consumer Preferences and Demand

* High-end Collection Market: Mainly prefers Xinjiang Hotan Bi-Yu's old mine material and 'spinach green', pursuing its rarity, oiliness, pure color, and cultural connotations. Price sensitivity is low, with more emphasis on artistic and heritage value.
* Mid-to-High-end Wearable and Gift Market: High-quality 'yang green' and 'apple green' Russian Bi-Yu are mainstream choices, balancing aesthetics, cost-effectiveness, and wearing comfort. Some consumers are also starting to pay attention to the characteristics of Canadian Bi-Yu.
* Mass Consumer Market: Qinghai Bi-Yu and ordinary Russian Bi-Yu, due to their price advantage, are the first choice for entry-level consumers, mainly used for daily wear or small decorative items.

Figure 3: Demand Share of Different Bi-Yu Varieties in Various Market Segments (2023)

| Bi-Yu Variety | High-end Collection Market (%) | Mid-to-High-end Wearable/Gift Market (%) | Mass Consumer Market (%) |
| :------------ | :----------------------------- | :--------------------------------------- | :----------------------- |
| Xinjiang Hotan| 80 | 15 | 5 |
| Russian | 10 | 60 | 30 |
| Canadian | 5 | 15 | 10 |
| Qinghai | 0 | 5 | 50 |
| Others | 5 | 5 | 5 |

(Source: Industry surveys and expert interviews, estimated data)

Trend Judgment

• Scarcity Drives Continued Growth in High-end Market: The depletion of Xinjiang Hotan Bi-Yu resources is an irreversible trend, which will further push up its prices. The investment value of top-grade old mine material and 'spinach green' will continue to be prominent, becoming an important part of scarce asset allocation.


• Russian Bi-Yu Market Segmentation and Quality Improvement: Russian Bi-Yu will continue to dominate the market, but consumers will demand higher quality. High-quality, black-spot-free, uniformly colored Russian Bi-Yu will be more popular, and prices will steadily rise. At the same time, the application of Russian Bi-Yu in the field of carving art will become more widespread, increasing its added value.


• Internationalization and Specialization of Canadian Bi-Yu: Canadian Bi-Yu, with its unique color and hardness, will gain more attention in the international market and large-scale carving fields. With the improvement of carving techniques and brand promotion, its market recognition and investment value are expected to further increase.


• Differentiated Competition for Qinghai Bi-Yu: Qinghai Bi-Yu will continue to serve the mass market with its cost-effectiveness, but its development will increasingly rely on specialized carving and innovative designs to enhance its cultural added value and market competitiveness.


• Digitalization and Traceability System Construction: With technological advancements, technologies such as blockchain will play a greater role in jade traceability and authenticity identification, boosting consumer confidence and regulating market order. This will positively impact the investment value of all Bi-Yu varieties.

Investment Recommendations

Based on the above analysis, we offer the following investment recommendations for different Bi-Yu sub-categories:

• Core Allocation – Xinjiang Hotan Bi-Yu (Old Mine Spinach Green): For investors seeking long-term stable appreciation and high collection value, it is recommended to allocate Xinjiang Hotan Bi-Yu (especially old mine material and 'spinach green') as a core asset. This type of Bi-Yu has strong anti-inflation and value preservation capabilities, but the entry barrier is high, requiring professional identification skills. It is advisable to purchase through authoritative channels and pay attention to its texture, oiliness, color, and size.


• Stable Allocation – High-quality Russian Bi-Yu: For investors seeking moderate risk and stable returns, high-quality Russian Bi-Yu is an ideal choice. It has good market liquidity, moderate prices, and significant appreciation potential. It is recommended to choose material with pure color, no black spots, and delicate texture (such as 'yang green' or 'apple green'), or exquisite pieces carved by renowned jade carvers.


• Potential Allocation – Canadian Bi-Yu: For investors with a certain risk tolerance and optimism about its future development potential, a moderate allocation to Canadian Bi-Yu is advisable. Focus on high-quality raw material that is emerald green and large enough for carving. It has significant growth potential in the international market and specialized art fields.


• Cautious Allocation – Qinghai Bi-Yu and Other Common Varieties: For investors with smaller capital or lower risk appetite, Qinghai Bi-Yu and ordinary Russian Bi-Yu can be chosen as entry-level or daily wear options. When investing in these varieties, more emphasis should be placed on their craftsmanship and design value rather than solely on material value, and high investment returns should not be expected.

Investment Portfolio Suggestions:

* Conservative Investors: 70% Xinjiang Hotan Bi-Yu + 30% High-quality Russian Bi-Yu
* Stable Investors: 40% Xinjiang Hotan Bi-Yu + 50% High-quality Russian Bi-Yu + 10% Canadian Bi-Yu
* Aggressive Investors: 20% Xinjiang Hotan Bi-Yu + 40% High-quality Russian Bi-Yu + 30% Canadian Bi-Yu + 10% Qinghai Bi-Yu (premium)

Risk Warning

• Counterfeiting and Inferior Products Risk: The market contains a large number of counterfeit and inferior Bi-Yu products, especially imitations of Xinjiang Hotan Bi-Yu. Investors need to possess professional identification knowledge or seek appraisal from authoritative institutions.


• Price Volatility Risk: Although the overall trend for Bi-Yu is upward, prices of some varieties may still experience short-term fluctuations due to macroeconomic conditions, market sentiment, policies and regulations, and international trade environments.


• Liquidity Risk: High-end Bi-Yu, especially large art pieces, may have longer transaction cycles and relatively poor liquidity.


• Aesthetic Preference Change Risk: Consumer aesthetic preferences can change over time, potentially affecting the market demand and prices of certain colors or textures of Bi-Yu.


• Policy and Regulatory Risk: Jade mining, processing, and sales may be affected by adjustments in national policies and regulations, such as environmental policies, export restrictions, etc., thereby impacting market supply, demand, and prices.


• Resource Depletion Risk: The non-renewable nature of high-quality Bi-Yu resources, particularly Xinjiang Hotan Bi-Yu, determines its scarcity. However, excessive speculation may also lead to inflated prices, and bubble risks should be guarded against.

Investors must conduct thorough market research and risk assessment before entering the Bi-Yu market, and consult professional jade appraisers and investment advisors if necessary.