The Pengjiang district government reportedly investigated after receiving a warning from animal-cruelty activists that stolen cats were being sold.
Authorities seized 235 cats, according to a South China Morning Post report.
The Beijing News reported that the cats were given health checks and then giving to an animal care group.
Dogs were also rescued from the market but it was unclear what happened to them.
Get breaking news alerts in the FOX5NY News app. Download for FREE!
A cat owner in Shanghai used GPS technology to track the cat and located it 1,500 kilometers away at the market.
Animal rights activists told the newspaper that some cats were found still wearing collars.
Police told The Beijing News that an investigation was continuing but they could not yet prove the animals were going to be slaughtered and sold as animal meat.