China has become a land of increasing home ownership, with new residential construction evident throughout the country. This growth has created a boom in the domestic consumption of home textiles, further providing a boost to the upward consumption of cotton and man-made fiber. Cotton is heavily used in towels, blankets and sheets, while man-made fiber dominates curtains, tablecloths and other fabric decorations.

A survey by the FAO in 2005 indicated that 63 percent of all new homebuyers spent over 4,000 yuan on home furnishings or approximately 528 U.S. dollars at today's exchange rate, while 5 percent spent over 20,000 yuan or approximately 2,639 U.S. dollars -- expenditures appear to have increased even more in 2006 and 2007. In 2005, the FAO estimated that the booming market for home textiles accounted for 30 percent of total fiber use in China, which was up from 19 percent in 2000.

This surging domestic demand also explains why many of China's home textile manufacturers are concentrating on this market instead of battling for share in the export markets, where growth is much more subdued. The volume of fiber consumed in China by home textiles increased by 263 percent or 52.6 percent annually between 2000 and 2005. This means that consumption by the end of 2007 will likely increase at least another 100 percent. A continuation of this growth pattern will have major ramifications for global trade in home textiles as China withdraws further from exports to concentrate on the domestic market.