It is estimated more than 80 percent of the domestic cotton produced in 2013 will find its way to the national reserve, according to the council's website.
Zhu Beina, director of China Cotton Textile Association, said although the nation's textile industry faced great challenges in 2012, technological and management upgrades meant that many companies were still in fine fettle.
In addition to rising raw material costs, increased labor costs have driven some order to competitors in Southeast Asia.
Industry leaders have urged companies to focus more on the domestic market.
Gao said domestic consumption of textiles and garments grew 18.2 percent between January and November 2012, much higher than overall retail consumption.
"I think it may no longer be convincing to attribute the decline of our industry to 'insufficient domestic demand'," Gao said.
Wang Tiankai, director of China National Textile And Apparel Council, earlier told Economic Daily that export-oriented textile companies in China should focus on the domestic market while overseas demand remains sluggish.
Many trade textile companies set their production targets according to orders rather than the overall market situation. Now with the rise of domestic consumption, knowing how to market in China is a must, he said.
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