Crypto to become a trillion dollar market is already a great improvement, and of course that's likely to happen if China will fully embrace crypto and they will legalize it. Most of the rumors in the past that has a big effect on the market are coming from China, remember when China ban crypto, the market bleeded that time so if its a positive news, the opposite would happen.

Also, the reason of the recent surge of BTC was the announcement of china to develop blockchain, so this means people would ride on the hype and this market will eventually grow.

Who can tell? Many in China still invest and trade thanks to VPN and foreign exchanges. If cryptos get legalized, the market would definitely skyrocket, but there is no way of telling how much it might grow. It would be interesting to see, but it is unlikely to actually happen. If China allows the use of cryptocurrency, it will be the use of its own cryptocurrency.