This would automatically shift demand to digital gold, aka Bitcoin. If that happens, you can expect China to take action restricting purchases of Bitcoin in some time. So a short and quick raise in bitcoin's price would be followed by a dump. 
Actually yes. How then would China restrict purchases and access to BTC? They can make it harder for their citizens but the cannot do it totally. The Chinese government would have to shut down the internet to do that.
I find it odd that China is restricting gold. Would that mean that they are desperate and they are trying to prevent a financial crisis from happening? If that were the case then wouldnt it be better for them to buy gold as long as it is all stored inside the country?