JAPAN DIVERSIFIES TO COMPETE Despite recent headlines about a “dying” Japanese pearl industry, cultivators and dealers are hopeful for the future. Their optimism may seem misplaced. While South Sea pearl powerhouses Tahiti and Australia increasingly woo consumers to their expensive products, freshwater pearls from China threaten to take over the market for smaller sizes. Prices are high (up about 12% in the first six months of 1997 over the same period of ’96) with quality goods scarce. And just when cultivators felt they had perfected the culturing process with state-of-the-art technology and research, they faced sudden, mysterious oyster mortalities and some really bad press. Yet the Japanese are ready to bounce back by regaining their competitive edge. “The fact that different countries now produce pearls is an irreversible trend,” says Izumi Yamamoto, president of the