Shanxiahu Town in Zhuji City, Zhejiang Province, is the world’s largest distribution center for the pearl industry. The pearl trade volume here accounts for 80% of China’s and 73% of the global market, with a market scale exceeding 50 billion yuan. How does a small town possess such influence? Recently, an investigation team visited the area to explore the reasons.

In the 1970s, the first generation of pearl farmers in Shanxiahu learned pearl cultivation techniques from Jiangsu and began farming pearls. Decades later, what was once an “experiment” has now become a “strength”—the local pearl industry has become a provincial-level historical and classic industry in Zhejiang and one of the representatives of the region’s cluster economy. In recent years, Shanxiahu Town has continued to evolve, embracing comprehensive green transformation and upgrading to a diversified business model, unlocking the “secret” behind how a “small pearl” keeps gaining new vitality.

Shanxiahu Town

Shanxiahu Town, located in Zhejiang Province, China, is a picturesque lakeside town known for its scenic beauty and tranquil environment. Historically, it developed around the Shanxiahu Reservoir, which was constructed in the 1950s to support irrigation and water supply in the region. Today, the town attracts visitors with its lush landscapes, outdoor activities, and cultural charm.

Zhuji City

Zhuji City, located in Zhejiang Province, China, is a historic city known as the birthplace of Xishi, one of the “Four Great Beauties” of ancient China. It has a history dating back over 2,000 years and is famous for its pearl industry, being a major global hub for freshwater pearl production. The city also boasts cultural landmarks like the Xishi Memorial Hall and scenic spots such as the Wuxie Scenic Area.

Zhejiang Province

Zhejiang Province, located on China’s southeastern coast, is renowned for its picturesque landscapes, rich history, and vibrant cultural heritage. It was a key center of ancient Yue culture and the Southern Song Dynasty (1127–1279), with historic sites like West Lake in Hangzhou and the Grand Canal. Today, Zhejiang is a thriving economic hub, known for its tea production (e.g., Longjing tea), silk industry, and tech innovation.

pearl industry

The pearl industry has a long history, dating back thousands of years, with natural pearls once being highly prized in ancient civilizations like Mesopotamia, Rome, and China. In the early 20th century, the development of cultured pearls by Kokichi Mikimoto revolutionized the industry, making pearls more accessible. Today, major producers like Japan, China, and Australia farm pearls sustainably, maintaining their status as symbols of luxury and elegance.

Jiangsu

Jiangsu is a coastal province in eastern China, known for its rich history, cultural heritage, and economic prosperity. It was a key region in ancient China, home to cities like Nanjing, which served as the capital of several dynasties, and Suzhou, famous for its classical gardens and canals. Today, Jiangsu is a thriving economic hub, blending traditional charm with modern development.

provincial-level historical and classic industry

“Provincial-level historical and classic industry” refers to traditional industries recognized by provincial governments for their cultural and historical significance. These industries often involve centuries-old craftsmanship, such as pottery, textiles, or food production, and reflect regional heritage. Preservation efforts aim to sustain these practices as living cultural assets while promoting economic and tourism value.

cluster economy

A **cluster economy** refers to a geographic concentration of interconnected businesses, suppliers, and institutions in a particular industry, fostering innovation and efficiency. This concept, popularized by economist Michael Porter, highlights how proximity enhances collaboration and competitiveness, as seen in tech hubs like Silicon Valley. Historically, industrial clusters have driven regional economic growth, from 19th-century textile districts to modern-day innovation centers.

diversified business model

A diversified business model refers to a company’s strategy of operating in multiple industries or product lines to reduce risk and increase revenue streams. This approach can involve expanding into new markets, acquiring different businesses, or developing varied product offerings. Historically, companies like General Electric and Samsung have successfully used diversification to adapt to changing markets and sustain long-term growth.