Pearls from the paddies

by Steve Cunningham
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A NEW crop is growing in the rice paddies of the eastern Chinese town of Shanxiahu. Pearls.

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Farmers are turning their paddies into pearl ponds and becoming incredibly rich in the process.

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Last year, China eclipsed Japan's pearl trade - and Shanxiahu (population: 28,000) is now being called the pearl capital of the world.

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Large houses with turrets are springing up across the countryside, dwarfing the peasants' grey, mud-brick homes.

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Mercedes cars are now a common sight on the dirt roads. Residents sometimes refer to their town as the 'millionaires' club'.

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James Peach, an American shell and pearl trader who has been coming to Shanxiahu since the mid-1970s, said: 'It's the great China pearl rush. It's contagious; it's moving from one farm to the next.'

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Last year, China's former paddies produced out more freshwater pearls from mussels ($170 million) than Japan's seawater variety from oysters ($131 million).

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Shanxiahu's pearls - big, lustrous and with a purple tinge - are popular among Asian women and the younger market. The fashion has turned the town upside down.

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More than half Shanxiahu's residents are now in the pearl business and the most successful is He Xiaofa, a second-generation pearl farmer now said to be worth �8 million. He drives a Merc and entertains himself with a large flat-screen TV.

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He carries round a pinkish pearl the size of a marble. He says he's been offered �23,000 for it, but won't sell.

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His father started the family pearl business, but wasn't so lucky. In the 1970s he worked on a state rice farm, got the idea for a little extra money, and dug a pearl pool. Most of the mussels died and the pearls were small, irregularly shaped and wrinkled - 'Rice Krispies', the dealers sneeringly called them.

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The son helped change that. He began experimenting with new mussel species and methods and by 1985, he was harvesting a few pounds of pearls a year. Today, his ponds yield up to five tons annually.

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It's all fantastic business. But will this boom turn to a bust

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Last year, He Xiaofa seeded his pond with extra mussels and expects a bumper crop of large pearls in 2003.

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He is not alone. The farmers all want a piece of the action. Experts are predicting that China's freshwater pearl production will grow from 650 tons to 10,000 tons by the end of the decade.

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Pearl prices may drop dramatically, perhaps by as much as 80%. And, if everyone can afford that pearl necklace, who will want to buy them