Well if they have overcrowded the mining environment that does not allow the smaller outfits to compete for the amount of coins available to mine. Then yes they are controlling how much is available across the board. Essentially hording all the available power to mine those coins available.
China can only afford to dominate the mining sector but they can never be able to dominate the investment sector.
Just to continue their mining process, they must need to sell of their reward bitcoins so the rest of world will simply benefit from that. Most people cannot afford to be mining but will prefer to buy the bitcoins, it means China is doing the right thing for the growth of bitcoin ecosystem.