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China's massive foreign exchange reserves mainly came from the sharp increase of surplus in goods trade, according to the latest report from the People's Bank of China.

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The hefty rise in goods trade surplus is due to China's improving manufacturing capability and the country's booming exports supported by the robust global economy. said the report of the central bank.

China's foreign exchange reserves reached 1.066 trillion U.S. dollars at the end of 2006.

Surplus in foreign direct investment (FDI) under the capital account decreased slightly as Chinese enterprises sped up overseas investment, said the report.

Figures with the Ministry of Commerce showed China's actual use of FDI totaled 69.5 billion U.S. dollars in 2006, down 4.1 percent year on year.

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