In September, China’s foreign exchange reserves hit their highest level in a decade, indicating the nation’s increasing economic resilience amidst various external challenges, according to official figures. At the same time, gold reserves saw an uptick for the 11th month in a row, suggesting a trend that might continue as the country enhances its reserve composition amid waning confidence in the US dollar.
The reserves grew to $3.3387 trillion in September, marking a 0.5% rise—an increase of $16.5 billion—compared to the previous month, as reported by the state administration of foreign exchange. This total is the most substantial since November 2015, when reserves totaled $3.4383 trillion. Foreign exchange regulators noted that China’s stable economic performance and emphasis on high-quality growth could sustain this stability in reserves moving forward.
Guang Tao, the global chief economist at China Investment Bank, pointed out that the reserves have reached levels not seen since late 2015, underscoring China’s capability to manage external pressures. He mentioned that while this recent uptick is mainly driven by perceptions of global financial assets, adjustments made by the US Federal Reserve in September could lead to some fluctuations in the dollar’s value, subsequently affecting the worth of non-dollar reserves.
Similarly, Wen Bin, the chief economist at China Minsheng Bank, suggested that the increase in foreign exchange reserves is partly attributed to the resilience of the country’s exports as well as the uptick in Renminbi financial assets. The diversification of trading partners and improvements in product structures, along with ongoing trade discussions with the US, have all helped maintain stability in cross-border capital flows. An increased influx of foreign investors into domestic securities is also likely to bolster the Renminbi’s attractiveness on the global stage.
Despite some global trade uncertainties, China’s exports of goods rose by 7% in the first half of the year, reaching $1.7 trillion and resulting in a goods trade surplus of $456.7 billion, according to balance of payments data from the state administration of foreign exchange. The same data reflected that net foreign investments in domestic land securities hit $37.3 billion during this period, surpassing $26.6 billion from 2024, with stock investments comprising three-quarters of that total.
As of the end of September, China recorded 11 consecutive months of growth in its gold reserves, reaching 74.06 million ounces, which is up from 74.02 million ounces a month prior. This increase coincides with soaring international gold prices, driven by expectations of interest rate cuts from the US federal government and intensified policy independence. A government shutdown in the US could further diminish trust in the dollar, consequently boosting demand for safe-haven assets, which saw Comex Gold futures hitting a record high of 4,000.1 during trading on Tuesday.
Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, noted that the trend of growth in China’s central bank could likely continue to refine its reserve structures, especially as international gold prices remain on a long-term uptrend. However, he highlighted that the additions to China’s gold reserves in September were the smallest since purchases resumed in November 2024, with gold now making up 7.7% of the nation’s total international reserves—a figure notably lower than the global average of 15%.
Wang added that an increase in gold holdings could further encourage the internationalization of the Renminbi. Additionally, he emphasized that adequate foreign exchange reserves play a critical role in maintaining the yuan’s exchange rate at a reasonable and balanced level.
