Yes, the manufacturers at the quality end of a particular market still tend to be in the developed world, but it doesn't take long for things to change. When I was a kid, "made in Japan" meant junk. It didn't take long for that situation to turn around (ironically because of American training in quality control).
China's worry would be a big fall in exports, for whatever reason, as their home market cannot yet afford to buy all of their production. They need to manage growth carefully in case they get too far ahead of themselves. They appear to be doing that management.
Meanwhile they buy US long term bonds to finance American credit, so Americans can buy more Chinese goods.