Autumn is pearl harvest season and the roadsides around Shanxia Lake are heaped with mounds of mussels stripped of their bounty.

The pearl growers of China are, however, unhappy. From the workers handpicking treasure from the flesh of freshly netted mussels to the girls in high heels hawking the lustrous gems in city boutiques there is a shared concern: the financial crisis.

Nine out of ten pearl necklaces in the world originate in this fertile corner of southeastern China where production has multiplied over the past decade to swamp the world with pearls. Now the good times are gone. Qian Wenhao switched from fish farming to pearl cultivation more than 15 years ago. Squatting on a concrete block in the yard of his house, he split open a mollusc with a chopper to reveal its creamy flesh hiding a dozen or so rounded lumps. He dug his fingers through the meat and extended a palm filled with gleaming pinkish spheres.

“Not bad, eh? I can expect to get about 20 or more pearls in each shell. I’m a lucky man if even half of my production is good quality.” Then, with a shrug and a sigh, he added: “But this year is no good. It’s the world financial crisis. Demand has really dropped.”

The Christmas season offers scant hope. “If people in the United States and Europe don’t have money they certainly won’t be buying luxuries. They will be making sure they have enough to eat,” said Mr Qian.

China produced 1,600 tonnes of pearls last year, more than 95 per cent of world production. Its gems are freshwater, grown in lakes and ponds in Zhejiang province. Merchants are proud of the lustre and the many irregular shapes - from rice grain to coins – but round pearls remain most highly prized, although these are rare and cannot match the perfect spheres found in highly prized seawater oysters.

The rapid growth of China’s industry has meant pearls are no longer the preserve of the rich. Prices have dropped sharply from a decade ago, when large-scale pearl farming was still in its infancy: then one kilogram of pearls fetched as much as 20,000 yuan (£1,900); today the price is closer to 2,000 yuan with a single string of small oval pearls costing as little as 10 yuan (95p).

Seeing the profits to be made, fish farmers dived into the business, leading to overproduction, fierce competition and intensive farming that has left the lakes badly polluted.

Authorities in some provinces have banned pearl cultivation in lakes and reservoirs. Pan Jianlin, of the Jiangsu Province Pearl Industry Association, said: “Mussels eat plankton in the water and can purify it.

But some farmers are not raising pearls properly. They use fertiliser to feed the plankton.”

Mr Qian sliced open another shell and tossed it to a worker. “The Government does try to limit the use of fertiliser,” he said. “But how can they enforce it? We really don’t pay much attention to them.”

The 45-year-old has more pressing worries. He will barely break even this year. He grows 100,000 new molluscs each year and harvests a similar number once they are five years old. He has even moved some of his production to other provinces, where large shallow lakes offer an attractive alternative to the intensively farmed waters of Zhejiang.

Once his pearls have been cleaned and sorted, Mr Qian sells them to wholesale merchants such as Chen Guoping. Mr Chen’s stall is one of 5,000 in the newly opened 1.2 million sq m China Pearl and Jewellery City that has ambitions to dominate the world market. Gleaming strings of gems lie piled in white plastic boxes but Mr Chen isn’t expecting buyers any time soon.

The huge complex is virtually deserted on an afternoon a month before Christmas. “Usually foreigners place a lot of orders for this big holiday in the West. This year we have been hit by the financial crisis. Things have been really quiet for the last month or so,” said Mr Chen.

Prices have halved. He held up a string of large pearls the size of broad beans. “These cost 600 yuan a kilo a year ago, now they are selling for only 300.”Despite the industry’s troubles Mr Qian has no plans to return to fish farming. “People will always want pearls. I want to be ready when the market recovers.”

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