Clearly $1 trillion moves markets. Is China bullish for stocks, bearish for bonds? They want to sell most of their $353 billion in Treasury Bonds, therefore price will go down. And buy and hold massive quantities of US stocks, this is bullish of course. Perhaps even bullish enough to get this sideway market to be bullish again?
I don't think they are interested in acquiring more U.S.D. valued assets. I think the idea is to diversify their exposure away from a high concentration of U.S.D. denominated assets.
It's bearish for everything. Look at it this way. When "foreign" investors become interested in "foreign" assets, it tends to mark a long-term top because foreigners require more time and confidence to develop buying interest in foreign assets. By the time they act, the trend is over. They're (China) the final-fool at the top of the market.