No longer just over the top rocks.

Or expensive baubles to show off with an evening dress.

Diamond demand is soaring in China as a hard-nosed and bankable investment - outstripping the rest of the jewelry market, traditionally made up of jade and gold.

(SOUNDBITE) (English) ELIAD COHEN, CHIEF INVESTMENT OFFICER, NOVEL ASSET MANAGEMENT, SAYING:

"I think that what we see in the past few years is that more and more Chinese looking at diamonds as an investment, not just a toy to wear it or for parties and things like that. But definitely they're one of the biggest and the most important investors for this type of industry."

In Hong Kong, a shopping heaven for mainland China tourists. Shops with the glittering gems are sprouting up all over the place - next to McDonald's and near alleyways.

I decided to find out what choosy consumers are looking for, paying a visit to Arnaud Bastien CEO of Graff Diamonds Asia, which now has 13

stores dotted around the region.

(SOUNDBITE) (English) REUTERS REPORTER, TARA JOSEPH, SAYING:

"Arnaud, tell me - in terms of the Chinese clientele that are coming in, what are they buying? What is the hottest trend out there?"

(SOUNDBITE) (English) ASIA CHIEF EXECUTIVE, GRAFF DIAMONDS, ARNAUD BASTIEN, SAYING:

"I would say we have two types of Chinese clientele. One is mainly composed of newly rich people, and those people are still a bit 'bling bling' in their choice. They are looking for large pieces, mainly white diamonds. But the quality of the stone is not the most important factor. And then there is a growing clientele of more established, wealthy Chinese that are probably rich for over ten years already, that are much more educated to what is a fine diamond. And those people would look for more a single stone, something exceptional, something that can truly be regarded as an investment."

Arnaud had me convinced that diamonds really are a girl's best friend

But will Chinese investors always feel the same way?

They've piled into, and out of, other luxury assets, creating mini-busts in markets like wine and fine arts.

And diamonds are no different. Earlier surges in emerging-market demand have resulted bubbles that soon popped.

And with a pile of glowing diamonds being marketed everywhere from auction houses to chic shops, they could eventually lose some their unique luster.

ENDS

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