Strictly speaking, money (as opposed to currency) is whatever is the most commonly used currency in a given region. Gold is not generally used as a medium of exchange anymore (i.e. it is not a currency), so it is merely a valuable commodity.

They reasonably expect to be able to trade it for money, should they need to.

Why don't they have stocks, diamonds, or any other types of valuables in their vaults?

Uh, what? They do. The Chinese government owns approximately $60 billion worth of gold, and $1.2 trillion worth of US treasury bonds.

Let me rephrase... why don't they have anything other than gold or cash equivalents?

They're very much risk-adverse (for good reason). In exceptional circumstances, they will take on other assets, though. See - the US Treasury's stake in General Motors.