China last year overtook Japan to become the world's second-largest diamond market behind the United States with trade on the Shanghai diamond exchange rising 16.4 percent to more than US$1.5 billion.

Xinhua news agency yesterday said the year-on-year rise, when much of the rest of the world was mired in deep recession, was because of China's boisterous economic growth in 2009, which reached 8.7 percent.

"As the economy continued to develop in a stable manner, consumer demand for jewelry continued to grow, especially for diamonds for the wedding market," Xinhua said.

"In this year, China overtook Japan to become the world's second-largest diamond market for consumers behind the United States," it added.

China's increasingly affluent middle class and vast pool of customers are seen as key factors for the rise in diamond sales in the world's most populous country.

Demand for diamonds really started to develop in the 1990s when De Beers brought its global advertising campaign to China, tapping into the Chinese desire for conspicuous consumption and pursuit of Western lifestyle trends.