Smeared with mud and dust, men and women crouch in hollows they have dug on the banks of the river, scratching among the boulders for a stone to make their fortune.

Jade is their quarry. For thousands of years this precious stone has been treasured among Chinese who believe that it is imbued with mystical properties.

Now its price has rocketed. One gram of the best-quality jade can trade for as much as 10,000 yuan (£600), or 40 times the price of gold. The price has quadrupled this year alone. And so the wide alluvial banks of the Yarlungkax River are dotted far into the distance with the figures of treasure hunters who have joined a jade rush at an oasis on the fabled Silk Route.

They have not arrived by chance. The jade of Khotan, in western China, has been among the most sought-after, prized above all for its white colour that is famed as “sheep fat” jade.

The huge number of searchers – there are as many as 100,000 in the peak season in the spring – has fuelled anxiety among local officials, who fear the depletion of resources and damage to the environment, and have ordered a crackdown against private mining. But such edicts have done little to deter small-time panners like Yimin Narhun. The 25-year-old shovels out a ditch in which he can scrabble for stones while his wife and three-year-old son watch. He has been here for a week. “I have found nothing,” says the illiterate sheep farmer. “But you never know. One good rock and my fortune is made.”

Dozens of red, orange and blue bulldozers are lined up on the riverbank, a graveyard to the hopes of bigger investors. Commercial excavation has been banned, licences have been revoked and machinery stands idle. Village collectives who invested in trying their luck have been impoverished, by the regulations and their lack of success. But the desire to find just one tiny pebble of the rare nephrite jade is enough to inflame the ambitions of thousands more.

Mehmet has been panning for months and wanders over to join a group of fellow Muslims of the local Uighur minority as they crouch among the boulders. He holds out a green stone the size of his palm. The men turn it over and hold it up to the light. Mehmet wants five yuan (35p). One man hands over a 10-yuan note and pockets the stone. “This could bring me luck, you never know. But it’s basically worthless.”

The elderly Uighurs look down the river. “In the summer,” one said, “this whole place is black with people. If there are 5,000 searching then maybe 100 will find some good jade.” His companion joins in. “There’s always a chance, you just never know. And the price is now so high.” The Uighur jade seekers mention prices that seem to border on hysteria.

On a riverbank at the edge of town hundreds of Uighurs crowd together in a makeshift market. Some lay out their wares on wooden bedsteads: chunks of rock that look more like brown-veined stones than the stuff of dreams. Others open a fist to show a motley handful of pebbles from white to green to brown.

One merchant says that he has been in the business for two years. Mehmet Wuer is confused by the frenzy. “This jade is popular with the Han Chinese. I don’t know why they like it but they pay very high prices and so that’s good for us.”

Roadside shops line the streets. Khotan jade, cut into shapes from tiny smiling Buddha heads to shrimps, monkeys, flowers and fruit, sell for spectacular sums. A small white Buddhist figure carved from mutton-fat jade is on offer for 100,000 yuan (£6,500).

One shopkeeper trained as a stonecutter and made his way three years ago to the site of the most famous jade in China to try his luck. Zhang Yonggang has no regrets. “In times of chaos people buy gold. In times of peace, people buy jade.” China’s surging prosperity has created a class of consumers nostalgic for the most precious items from their past.

Virtue and reward

— Jade from Khotan was sent as tribute to Chinese emperors. The seals with which an emperor stamped state documents was cut from it

— It has long been associated with purity and morality. Confucius saw 11 virtues in the stone as models for human behaviour

— Superstition holds that jade can ward off evil and bad luck

— The wealthy were buried in suits sewn together from tiny discs of jade believed to prevent decomposition

— An ancient proverb goes: “A gentleman is like jade”

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