THE rise of the Chinese domestic consumer and the country's most recent five-year economic development plan bodes well for wool growers, according to AWI's market intelligence and trade reporting manager Paul Swan.

In His AWI Market Intelligence report last month, Dr Swan said the plan, covering 2011-2015, foreshadowed a golden decade for China's wool textile industry, but with''downside risks''including high fibre prices, domestic inflationary pressures and Chinese currency appreciation hampering export competitiveness.

The China economic development plan's objectives include:

a major effort to upgrade innovation capability in the wool textile industry, promotion of processing eco-sustainability,

en couragement of domestic retail brands to add value and the export of indigenously-branded textile products,

optimising the capacity and efficiency of small to medium-sized enterprises that make up 90 per cent of China's textile businesses.

Dr Swan said the plan sought to support the transition of China's economy from an export-driven model to one driven by domestic demand.

China has the world's largest textile industry with an output value expected to reach US$65 billion by 2015, representing an annual increase of about 11pc.

''Importantly, the importance of the domestic consumer expenditure on wool textiles compared to export income will rise rapidly, reflecting rapid urbanisation, consumer income growth, and increased expenditure on clothing,'' Dr Swan said.

Highlighting the rise of the Chinese domestic consumer was the value of China's trade goods reaching $800 million, up 30pc year-on-year, with imports exceeding exports in the first quarter for the first time since 2004 and resulting in a trade deficit of US$1b.

In March this year, exports of textiles and apparel reached $16.6b, up 59pc on February and 51pc year-on-year.

Dr Swan said the value of China's economy, expressed as a share of global gross domestic product, already exceeded that of Japan, traditionally Australia's second largest wool consumer market.

By 2015 China's economy/domestic textile market is expected to exceed that of the Eurozone markets, with one in every seven dollars of economic value generated in the world created in China and one in three dollars made in the 14 Asia-Pacific region, he said.