Okay, here are some of the basics of how Chinese market changed over the past few years that people need to know.
The Chinese market as of 2016 is 4.5 times bigger than the market was in 2010 and more than 7.3 times bigger than what it was in 2009. It was often argued that the released of Avatar in 2009-2010 and the 3D wave that came right after that is directly responsible for the rapid expansion of the Chinese market now approaching domestic market as the global #1 status. Avatar was big everywhere, but it holds a special place especially in China because of this. Avatar was one of the biggest cinematic event in modern China, when it was released, it tripled the gross of previous highest grossing film of all time (which was interestingly held by "2012" at the time), this would be comparable to a film coming out in north america tripling the gross of The Force Awakens, an unimaginable task. Avatar also accounted for about 13.5% of the total yearly movie gross of 2010 in China. One of the top three highest % on record (after "Hero" and "Titanic"). Avatar's status as the highest grossing film ever in China was not surpassed until 2014, when Transformers 4 came out, but of course, the market several magnitude bigger in 2014 compared to when Avatar was released.
If you want to get a feel of how big Avatar was in China, look at
this list of highest grossing films of all time in China.
Pay specific attention to what year Avatar was released and what year literally every other film on that list is released, you'll realize how big the market is now compare to 2009 and how much of a big deal Avatar was at the time to still rank #17 after all these years.
I can't say with certainty that Avatar 2 will make 1B in China. The current record holder for the highest grossing film in China is Wolf warrior 2 (2017), which
made $861M in China alone, the market is still expanding at a fairly good pace, if a movie released today can be this close to 1B, a movie released in 2021 in China can surely get there, question is whether Avatar 2 can be that film, we'll just have to see.
Furious 7 (a film significantly smaller than Avatar) made $400M in China in 2014 when Furious 6 only made $66M, so yes, a sequel can jump that much in box office in China, that's a completely different and wildly unstable market.