China Issues Jewelry and Precious Metals Fraud Warning

China’s consumer watchdog has issued a nationwide advisory warning shoppers about widespread fraud in the precious metals, jewelry, and jade markets, revealing that more than one in three complaints in the traditional crafts sector involve counterfeiting or false advertising.

The China Consumer Association (CCA) published its advisory on June 15, drawing on data from the National Consumer Association Smart 315 platform. Since the platform launched, authorities have received 19,421 complaints related to traditional crafts, of which 7,125 — or 36.69% — involved counterfeiting and false advertising, according to CCTV News.

A Market Riddled with Deception

The advisory highlights distinct patterns of fraud across different product categories. In the precious metals sector, unscrupulous merchants are passing off gold-plated, copper-clad, or alloy ornaments as pure gold or pure silver. Consumers often only discover the deception after wearing the items, which discolor or turn black over time. Some merchants also forge branded packaging and appraisal certificates, then disappear once consumers attempt to seek refunds.

In the jewelry and jade sector, the CCA reports that merchants misrepresent material types, treatment processes, and origin information — selling chemically treated jade as natural and passing off low-grade categories as premium varieties. Some merchants fabricate appraisal certificates entirely or counterfeit the official seals of legitimate testing institutions.

Livestreaming: A Growing Concern

A particularly troubling trend identified in the advisory involves livestreaming commerce, which has become a dominant sales channel in China’s e-commerce ecosystem. According to the CCA, some merchants abuse beauty filters and lighting effects during livestreams to make ordinary jade appear as high-quality stone. The result is a significant discrepancy between what consumers see on screen and what they receive.

“Participate rationally in livestream marketing,” the CCA warned. “Be wary of marketing gimmicks such as ‘bargain benefits’ and ‘limited-time flash sales’ claimed by hosts, and avoid being misled by beauty filters, lighting effects, staged performances, and persuasive rhetoric.”

Broader Regulatory Crackdown

The CCA advisory is the latest component of a coordinated government push against fraud in the traditional crafts market. In March 2026, the State Administration for Market Regulation (SAMR) and the Ministry of Public Security jointly launched a nationwide enforcement campaign — dubbed “Crack Down on Fakes and Clean Up Sources” — targeting fake certificates, fake products, fake institutions, and fake websites in the sector, as reported by state media.

On June 4, SAMR published eight typical enforcement cases from the campaign, revealing a range of deceptive practices. In one case, a merchant in Donghai County, Jiangsu, was fined 150,000 yuan (approximately $20,700) for selling 3,673 counterfeit jewelry items — including quartzite jade, treated jadeite, glass, and plastic passed off as natural gemstones — complete with fake certificates. In another case, a merchant in Sihui City, Guangdong, was fined 100,000 yuan for fabricating medical benefits for jewelry and staging dramatic “sob story” performances during livestreams to manipulate buyers.

Three-Point Consumer Advisory

The CCA has issued three specific recommendations for consumers:

1. Purchase through formal channels — Choose reputable brand stores and mall counters with good consumer reviews, and avoid private transactions through personal social media accounts.
2. Verify product information upon receipt — Inspect appraisal certificates and the legitimacy of issuing institutions promptly. Check that the sample images, weight, and material details match the product received. Report any fraudulent certificates to consumer associations and market regulators.
3. Be rational about livestream marketing — Stay alert to high-pressure sales tactics and avoid being misled by visual enhancements and staged performances.

Market Significance

China is one of the world’s largest markets for precious metals and jewelry, with traditional crafts holding significant cultural and investment value. The high volume of complaints — nearly 20,000 — and the proportion involving fraud indicate systemic issues that undermine consumer trust.

The combination of enforcement actions by SAMR and the Ministry of Public Security, coupled with consumer education from the CCA, represents a multi-pronged approach to market governance. For legitimate businesses, increased consumer awareness may boost demand for certified products. For fraudulent operators, the risk of enforcement continues to rise.

What to Watch For

Industry observers will be watching for follow-up actions from the CCA, including potential industry-specific recommendations or standards. The effectiveness of the “Crack Down on Fakes” campaign in reducing complaint volumes since its March launch remains an open question, as does whether regional variations in enforcement will emerge across China’s diverse provincial markets.