**EXHIBIT 4.1****Employment Agreement**The parties to this agreement are LJ International Inc., a British Virgin Islands Company (the“Company”) and YIH Yu Chuan (the “Executive”). The Company and the Executive hereby agree asfollows :**1.** **Employment and Duties**The Company shall employ the Executive and the Executive shall serve the Company asPresident and Chief Executive Officer of the Company. The Executive shall use his bestefforts to promote the interests of the Company, and shall perform his duties in relationto the Company and/or its subsidiaries (collectively “the Group”) faithfully anddiligently, consistent with sound business practices.**2.** **Term of Employment**The Executive shall be employed by the Company under this Agreement for a period of three(3) years commencing as of the date of this agreement.**3.** **Remuneration and Reimbursement** (A) Subject to Clause 5, the Executive shall receive during the continuance ofthe Appointment : (1)   A salary at the rate of HK$2,400,000 per annum such salary toaccrue on a day to day basis (including any sum receivable by the Executive asdirector’s fee from any company in the Group) and to be payable monthly intwelve equal installments in arrears on the last day of each calendar monthprovided that if the Appointment is terminated prior to the end of a calendarmonth, the Executive shall only be entitled to a proportionate part of suchsalary in respect of the period of service during the relevant month up to thedate of termination. Such salary shall be adjusted on annual basis at a rateto be determined by the Board as its absolute discretion having regard to theoperating results of the Group and the performance of the Executive.  (2)   An annual management bonus of a sum to be determined by theBoard at its absolute discretion having regard to the operating results of theGroup and the performance of the Executive during the relevant financial yearor any proportionate part thereof in which service of the Executive pursuantto this Agreement is rendered. The management bonus shall be payable inarrears in respect of each relevant financial year within one month after theissue of the consolidated audited accounts of the Group for such financialyear. The amount payable to the Executive shall be decided by majoritydecision of the members of the Board present in the meeting called for thatpurpose provided that the Executive
 

 
   shall abstain from voting and not becounted in the quorum in respect of the resolution regarding the amount sopayable to himself. (B) The Executive shall continue to receive his salary during any period ofabsence on medical grounds up to a maximum of 12 weeks in any period of 12 monthsprovided that the Executive shall if required supply the Company with medicalcertificates covering the period of absence.  (C) The Executive shall be reimbursed all reasonable out-of-pocket expenses(including expenses of entertainment subsistence and travelling) incurred by him onthe Group’s business which expenses shall be evidenced in such manner as the Board mayrequire.  (D) The Executive will be entitled to the benefits of any medical or providentfund scheme as maybe maintained by the Group from to time.  (E) The Executive shall be entitled to 12 working days paid vacation each year.**4.** **Other Benefits**The Executive shall be entitled, during the continuance of the Executive’s engagement hereunder,to the use of a motor car and the Company shall pay all vehicle registration fees, taxes andinsurance premiums in respect of the car and shall pay or reimburse against receipts allmaintenance, repair and other running costs in respect of the car and the cost of petrol.**5.** **Termination of the Appointment** (A) Without prejudice to the accrued rights (if any) or remedies of either partyunder or pursuant to this Agreement :  (1) the Executive shall be entitled to terminate the Appointment by two months’notice in writing to the Company if any money payable by the Company to the Executiveunder or pursuant to this Agreement is not paid in full by the Company to theExecutive within a period of 30 days from any written demand by the Executive for thepayment thereof;  (2) the Company shall be entitled to terminate the Appointment without anycompensation to the Executive : (a)   by not less than three months’ notice in writing given at anytime while the Executive shall have been incapacitated or prevented by reasonof ill health, injury or accident from performing his duties hereunder for aperiod of or periods aggregating 90 days in the proceeding 12 months providedthat if at any time during the currency of a notice given pursuant to thissub-paragraph the Executive shall provide a medical certificate satisfactoryto the Board to the effect that he has fully recovered his physical and/ormental health and that no recurrence of illness or incapacity can reasonablybe anticipated the Company shall withdraw such notice; or  (b)   by summary notice in writing if the Executive shall at anytime:
 

 
i.      commit any serious or persistent breach of any of the provisions herein contained (and tothe extent that such breach is capable of remedy shall fail to remedy such breach within 60 daysafter within warning given by the Board);ii be guilty of any given misconduct or willfulneglect in the discharge of his duties (and to the extent that suchbreach is capable of remedy shall fail to remedy such breach within 60days after written warning given by the Board);iii. become bankrupt or have a receiving order madeagainst him;iv. become a lunatic or of unsound mind;v. absent himself from the meetings of the Boardduring a continuous period of three months, without special leave ofabsence from the Board, and his alternate director (if any) shall notduring such period have attended in his stead;vi. become prohibited by law from acting as a director;vii.      be guilty of conduct tending to bring himself orany company in the Group into disrepute;viii.      be prohibited by law from fulfilling his dutieshereunder; orix. be convicted of any criminal offence (other than anoffence which in the reasonable opinion of the Board does not effect hisposition as a director of the Company). (B) If the Company becomes entitled to terminate the Appointment pursuant tosub-clause (A)(2)(b) it shall be entitled (but without prejudice to its rightsubsequently to terminate the Appointment on the same or any other ground) to suspendthe Executive without payment of salary in full or in part for so long as it may thinkfit.  (C) If the Executive shall have refused or failed to agree to accept withoutreasonable grounds an appointment offered to him on terms no less favourable to himthan the terms in effects under this Agreement, either by a company which has acquiredor agreed to acquire the whole or substantially the whole of the undertaking andassets of the Company or which shall own or has agreed to acquire the whole or notless than 90% of the issued share capital of the Company, the Executive shall have noclaim against the Company by reason of the subsequent voluntary winding up of anycompany in the Group or of the disclaimer or termination of this Agreement by theCompany within three months after such refusal or failure to agree.  (D) On the termination of the Appointment howsoever arising the Executive shall :(1) at any time and from time to time thereafter at the request of the Company resign fromoffice as a director of the Company and all offices held by him in any company in the Groupand shall transfer without payment to the Company or as the Company may direct anyqualifying shares provided by it or any shares held by the Executive as
 

 
nominee for theCompany or any company in the Group provided by it and the Executive hereby irrevocableappoints the Company to be his attorney and in his name and on his behalf to sign and doany documents or things necessary or requisite to give effect thereto and a certificate inwriting signed by any director or by the secretary of the Company that any instrument oract falls within the authority hereby conferred shall be conclusive evidence that such isthe case and any third party shall be entitled to rely on such certificate without furtherenquiry provided however that such resignation or resignations shall be given and acceptedon the footing that it is or they are without prejudice to any claims which the Executivemay have against any such company or which any such company may have against the Executivearising out of this Agreement or of the termination of the appointment; and (2)      forthwith deliver to the Company all books, documents,papers, materials, credit cards (if any) and other property of or relating tothe business of the Group which may then be in his possession or under hispower or control. (E) Save as expressly provided herein, neither party may terminate this Agreement.**6.** **Confidentiality**The Company shall not, at any time during or after his employment under this agreement,disclose to any third party, except in the performance of his duties under this agreement,any confidential information regarding the Company’s customers, suppliers, trade secrets orbusiness. The Executive shall return all tangible evidence of such confidentialinformation to the Company prior to or at the termination of his employment.**7.** **Waiver** (A) Time is of the essence of this Agreement but no failure or delay on the partof either party to exercise any power, right or remedy hereunder shall operate as awaiver thereof, nor shall any single or partial exercise by either party of any power,right or remedy preclude any other or further exercise thereof or the exercise of anyother power, right or remedy by that party.  (B) The remedies provided herein are cumulative and are not exclusive of anyremedies provided by law.**8.** **Former Service Agreements**This agreement contains a complete statement of all the arrangements between the parties withrespect to its subject matter, supersedes all existing and former agreements between them withrespect to that subject matter, may not be changed or terminated orally and any amendment ormodification must be in writing and signed by the party to be charged.**9.** **Notices**
 

 
All notices, requests, demands, consents or other communications to or upon the partiesunder or pursuant to this Agreement shall be in writing addressed to the relevant party atsuch party’s address set out below (or at such other address as such party may hereafterspecify to the other party) and shall be deemed to have been duly given or made :- (A) in the case of a communication by letter 48 hours after despatch or, if suchletter is delivered by hand, on the day of delivery;  (B) in the case of communication by telex or facsimile, when sent.The Company’s address :Unit 12, 12/F., Block A, Focal Industrial Centre