Gambling on green

On Shanghai's Xizang Road North, crowds gather in shops to watch a form of gambling that dates from the Ming Dynasty (1368-1644). A gambler buys a piece of ordinary-looking rock or stone, paying sometimes up to 200,000 yuan ($31,600). The stone is then taken to a corner of the shop where a gem cutter slices it with his machine.

The gambler is hoping that the cut will reveal a piece of jadeite jade inside. The rocketing price of jadeite, the valuable rare green form of jade, has seen ordinary Shanghai people with very little savings turn into millionaires. It has also seen many others ruined.

Cao Xutian works in a gem store on Xizang Road North and even after two years he gets a buzz whenever a customer buys a stone and gets it cut. He makes sure he is in the middle of the crowd that squeezes around the cutter.

The first slice usually reveals nothing. But the next slice, or the one after that, can reveal the distinctive green colors that indicate there is jadeite inside and that customer has become a winner.

Looks can deceive

The rocks and stones come from Myanmar which neighbors China's Yunnan Province. In the stores, the stones often have a tiny window cut in them that might or might not reveal what is inside. Customers buy these unlikely rocks and stones for between 20 and 200,000 yuan. The stones come in a variety of colors and shapes - some are black, others yellow or brown and some have green tinges.

But Cao warns that a green outside does not mean there is green jadeite inside. "The inner stone might just have green coloring and be worthless. But there might be an extraordinarily valuable jadeite inside an ugly black stone," he said.

"The thinner the skin of the outer stone, the easier it can be to judge whether there is jadeite inside," said Tang Zhongqiu, another store owner on Xizang Road North. He has been in the jadeite business for 20 years. Insiders use their experience to assess the potential for each stone. Ordinary customers should first look at the surface of a stone to see whether there are deep or long cracks which often indicate that the stone is valueless. After looking, canny customers spray water on the surface of the stone and shine a powerful light on it to see if there is transparency.

"Stones are non-transparent, semi-transparent or very transparent. The more transparent the stone is, the more likely it will have jadeite inside," Tang said. "If a solid piece of jadeite is found after the stone is cut, the customer can say goodbye to poverty. If there is nothing he has lost the price of the stone."

Even for experienced traders the purchase of a stone is a gamble. Tang reckoned that 30 percent of the success in this business could be attributed to experience and skill but 70 percent was just luck.

If there is jadeite inside after the stone has been cut, the jadeite can be carved and polished which can double the value of the piece. Even small pieces can be turned into pieces of personal jewelry.

No winner yet

Twenty-something Cao comes from suburban Shanghai and two years ago walked into a gemstone market by chance and bought some stones to be cut to see if he would be lucky. Since then he has spent thousands of yuan on stones and failed to find a winner but he is persevering.

"I was an outsider. It was no wonder I always chose the wrong stones and lost every time. But whenever the stones I bought were cut, there was a chance I could change my life. The waiting for the cutting was really exciting and it brought color into my dull life," he said.

Since the first encounters he has immersed himself in the study of jadeite in the hope that one day he will find that elusive precious stone and after that be able to live as a rich jadeite gambler. Cao is not the only one who is fascinated by the growing industry. His friend who opened the shop he works in had been in the furniture business before believing there was more to be made selling stones.

"Since last year more and more Shanghai people have been gambling on these stones and lots of shops have opened to cater for the demand," said Guo Linxue, vice secretary general of the Shanghai Gold and Jewelry Trade Association. "Last year several city gemstone dealers traveled to Myanmar which supplies nearly 90 percent of China's jadeite. They bought stones there in a government auction and back in Shanghai they put on an exhibition as well as other promotional events. A lot of Shanghai people became really interested in the business then."

In last August Shanghai saw its first Jadeite Stone Festival on Xizang Road South. The highlight of the festival was a stone from Myanmar which was sold for 20,000 yuan. When it was cut and a rich piece of jadeite was found inside, its value soared to 2.25 million yuan, the Xinmin Evening News reported.

It is not a new attraction. Gambling on uncut stones began in the Ming Dynasty when jadeite was brought into China from abroad. Traders offered uncut stones to people with the chance that they would find jadeite inside. Customers were being advised even then to look at the stones carefully.

"Like real estate and stocks, stones are a kind of investment. But when it comes to gambling whether there is a precious piece of jadeite inside stones by just looking at the outside, the stakes are much higher. A single cut can make you a beggar or a millionaire," Guo said.

"The real reason behind the passion for jadeite gambling is the soaring prices for jade and jadeite," he said. "Since the beginning of the new century, the value of jade and jadeite has rocketed to about 10 times its original worth. Jadeite is a non-renewable resource and it is close to being exhausted."

After centuries of exploitation there is little left in the ground. Several buyers are hanging on to their pieces of jadeite hoping the prices will climb even further.

Guo said that while ordinary people cannot afford to buy jade and jadeite they can buy stones. The gloomy stock and real estate markets have also seen more money flow into jadeite gambling.

 

Missed opportunity

One Shanghai enthusiast is Shanghai man Lin, now in his 70s. He often saw precious and semi-precious stones when he was a young man in the Gobi Desert. He had been sent to the Xinjiang Uyghur Autonomous Region as a zhiqing, the educated youth who were sent to rural areas during the Cultural Revolution (1966-76). But he did not realize their worth and ignored them.

"We were busy with struggling to feed our stomachs and nobody knew these were valuable. If I had picked up some or even one, my life might have been totally different," he said. He was an ordinary worker when he returned to Shanghai but now, after retiring, he developed a passion for jadeite gambling and has spent thousands of yuan buying stones.

Wu Chao sells jade and jadeite jewelry on Wuning Road in Putuo district and his prices range between 100 and 10,000 yuan. "In 10 years a 10-yuan jadeite piece has become worth 100 yuan because of the rising cost of the materials and the carving."

At a jewelry and jade exhibition in Myanmar last June, the trade turnover reached 7 billion yuan, more than double the turnover reported for a March exhibition also last year which offered the same number of stones but fewer quality items, the Oriental Morning Post reported.

Like all gambling, jadeite gambling has its own legends. Zhao Deliang, owner of a jade store on Dongtai Road in Huangpu district, was involved in jade and jadeite from childhood.

The middle-aged man comes from Nanyang, Henan Province, famous as a center for jade and antiques. He has seen the extremes of gambling.

"One elderly man spent his entire savings of 250,000 yuan on a 30-centimeter stone. As the stone was being cut he became more and more depressed and was about to return to his home and kill himself when suddenly a flash of green emerged. The stone contained an emerald worth millions," Zhao recalled.

Though Zhao will have stones cut for his customers, he never gambles himself. "Even if you have been in the industry for decades, it is still possible for you to choose the wrong piece. You might win today, but you will lose tomorrow. You can never win all the time. Ninety percent of the buyers I see end up losing money," Zhao said.

Many though are attracted by the potential of the high returns and approach it in different ways. Some of them contribute to joint funds, charter aircraft to Myanmar and bring hundreds of tons of the stones back to China, sharing their losses or profits.

 

The buyer must beware

This is a business fraught with risk and buyers have to be especially careful. Some traders will inflate the price for a stone. When an unsuspecting buyer then bargains a lower price than the marked price the buyer thinks he is getting a good deal but in fact is still paying well over the odds.

Guo Linxue warns: "If you are not familiar with jadeite, never gamble a large amount. Get to know about jadeite and the culture before you buy any stones."

Some dealers dye the stones green to convince unwary buyers that there really could be jadeite inside.

A few stores cut the stones and then seal them again if there is no jadeite inside. Buyers should look carefully for signs of a cut but sometimes this is hard to detect.

Other stores will drill into the stones to see if there is jadeite inside and disguise the hole.

Dealers have been known to sink pieces of green glass into stone encouraging innocent buyers to believe there is jadeite there.