China's foreign exchange reserves jumped to $3.32 trillionby the end of June 2025—their highest level in nearly a decadeand the sixth straight monthly rise—according to official data released by the State Administration of Foreign Exchange (SAFE). The $32.2 billion monthly increasemarks a quiet but significant milestone: the first time reserves have broken past the $3.3 trillion marksince September 2024 and the highest since December 2015.

For international observers, the move may appear technical—but the implications are anything but. In a world navigating de-dollarization, capital flight, and geopolitical risk, China's rising reserves and gold stockpiling offer a front-row view of how one of the world's largest economies is repositioning its global financial strategy.

A New High—And What's Driving It

June's increase came amid a broad decline in the U.S. dollar index (DXY -2.5%), coupled with a rally across global asset classes. Valuation gains in non-dollar assets—primarily the euro (+3.89%)and British pound (+2.1%)—played a key role, as most of China's reserves are USD-denominated.

SAFE attributed the rise to:

Currency translation effects, as the dollar weakened;

Rising asset prices, with global bond and equity indices climbing (e.g., S&P 500 +5%, hedged bond indices +1%);

And underlying confidence in China's domestic growth trajectory.

“This isn't just a rebound—it's a recalibration,” said Wen Bin, Chief Economist at China Minsheng Bank. “While the world debates U.S. fiscal credibility, China is quietly fortifying its buffers.”

Strategic Gold Buying: A Signal, Not a Side Note

While FX reserves grabbed headlines, another number speaks volumes: China's official gold reserves rose for the eighth consecutive month, now totaling 73.9 million ounces (2,298.6 tonnes). Though June's addition was just 2.18 tonnes, it aligns with a deliberate and ongoing shift toward asset diversification.

“With gold making up just 7.3%of China's reserves—well below the ~15% global average—there's ample room for expansion,” noted Wang Qing, Chief Macro Analyst at Dongfang Jincheng. “It's a hedge against the dollar and a bet on monetary multipolarity.”

This aligns with the World Gold Council's 2025 survey, which found over 90% of central banksexpect further gold accumulation over the next year—the highest reading since the survey began in 2019.

De-Dollarization Meets RMB Stability

For foreign institutions eyeing Asia-Pacific exposure, two trends are converging:

China is trimming reliance on U.S. Treasuries;

The RMB is gaining relative stability.

June saw the onshore RMB strengthen slightly, with the central parity rate, spot rate, and offshore price all converging—a key technical signal suggesting improved market confidence. As of July 7, the onshore RMB closed at 7.1747/USD, recovering from April's low of 7.3+.

“The trend toward ‘three-price convergence'boosts the credibility of the RMB midpoint as a market anchor,” said Guan Tao, Global Chief Economist at BOC International. “It also helps stabilize expectations, which is critical for portfolio flows.”

Meanwhile, foreign trading activity showed a cautious shift: interbank FX spot transactions fell 17% month-on-month, suggesting fewer speculative pressures.

What This Means for Foreign Stakeholders

 For asset managers: The increase in reserves and gold signals China is building insulation against global shocks. This enhances the credit qualityof RMB assets and adds depth to China's bond market—now the second-largest in the world.

 For corporates and exporters: A more stable RMB reduces currency volatility in trade contracts. The recent reserve uptick also reflects China's capacity to manage capital account pressures, which matters in cross-border payment planning.

 For sovereign funds and FX strategists: The gold accumulation and reduced U.S. Treasury exposure reflect diversification prioritiesthat may mirror emerging-market reserve strategies. China's actions could catalyze global rebalancing away from USD-centric reserves.

A Financial Firewall in a Fragmented World

June's data paints a picture of strategic composure. While developed economies wrestle with sticky inflation and fiscal drift, China is accumulating buffers—measured in trillions—not soundbites.

“At over $3 trillion, China's reserves remain at a ‘comfortably adequate'level by any metric,” said Wang Qing. “This gives Beijing powerful tools to counter FX volatility, cushion trade shocks, and guide RMB stability—all without heavy-handed intervention.”

In a time of rising uncertainty, China's reserve policy is increasingly looking less reactive and more predictive.

Snapshot: June 2025 Reserve Dynamics

Final Thought

In the world of capital flows, reserves are more than just numbers—they're geopolitical posture, risk insurance, and strategic messaging. China's latest figures show not just strength, but intent.

For global investors, it's a reminder: watch not what China says about de-risking—but how it balances the books.