Zhou Weixia, a gem shop owner, shows a man a rough sapphire stone in Changle, Shandong province. The county now abounds with 450 square kilometers of sapphire-rich land with deposits totaling more than one billion carats. [Photo/China Daily]

"For quite a long time, about 60 percent of sapphires in the county have been exported to other countries, such as Thailand and the United States, where the price will double, sometimes even triple," Cheng said.

Sapphires, along with diamonds, rubies and emeralds, are regarded as the world's top four valuable gemstones. They have long been popular among Western people, especially members of European royal families, who regard them as representations of love and faithfulness. A point in case is Prince William, who proposed to Kate Middleton with an 18-carat oval blue sapphire ring, which was his mother Diana's engagement ring.

"Sapphires do not share the same cultural identity in China as they do in the West. They are mainly bought by jewelry lovers and collectors. The majority of Chinese customers do not acknowledge their cultural value as they do for jade and diamonds," said Shi Hongyue, vice-general sectary of the Jewel and Jade Industry Association of China.

"Hotan jade prices have increased about 5,000 times in China over the same 10 years. Once ordinary people take to sapphires, their price will be quite different," said Shi, indicating the vast potential market.

To help more people know about the precious stone, an annual international sapphire festival has been held in Changle for 10 years.

The local government has also unveiled a range of favorable policies to stimulate the local jewelry industry, including startup funds, financial services and tax discounts.

A large gemstone processing and trading center - the Gem City of China - has been built. It is the only one of its kind named by China's State Administration for Industry and Commerce.

The center has attracted more than 200 leading jewelry companies from Beijing, Shanghai, Shenzhen, and Hong Kong, which promote the industry's growth. Changle has now established a complete jewelry industry chain from sapphire prospecting, mining, refining and processing to jewelry product trading.

The county has more than 2,000 companies involving in sapphire manufacturing, processing and trading. They can produce a total of 13 million carats annually, bringing in 36 billion yuan in trading volume, figures from the local authorities show.

An ambitious plan has been developed that involves the establishment of 2.6 million square meters of jewelry manufacturing and processing center with an annual turnover of 100 billion yuan by 2015.

By Ju Chuanjiang and Wang Qian (China Daily)

Zhao Ruixue contributed to this story.