Overproduction takes shine off Chinese pearls

By Rujun Shen

SHANGHAI (Reuters) - The prices of the lustrous strings of pearls that line display cases in Shanghai jewelry stores are more eye-catching than the glossy gems: some pearl sets cost under 10 yuan ($1.50) even before bargaining.

"All kinds of people come to buy pearls, Chinese and foreigners," said Wang Caijiao, who has been selling pearls in a two-storey shop on Shanghai's bustling Nanjing Road for seven years.

The massive volume of freshwater pearls on the market have made the gem affordable to the masses.

That might be good news for the migrant laborers and factory workers who can now afford pearls but it is bad news for the pearl industry which frets over the sinking prices of pearls and the damage to the gem's once exclusive image.

Now, local Chinese governments, concerned about environmental damage to lakes and reservoirs from pearl cultivation, are beginning to rein in production.

And what's healthy for the environment may end up being healthy for the industry as well.

"The pearl industry has not been doing well in the past two years because the output is too high," said Li Jiale, a professor at Shanghai Ocean University.

"The industry needs to reduce quantity and improve quality."