Looks like you have no idea what you are talking about here. let me correct you:

western traders had to use VPNs to get past the Great Firewall
bs. You don't need a vpn to access anything in China unless your government ban that content in your country. try visit okcoin.cn and you see. if you mean you have to have an China IP to register & trade in Chinese exchangers then it's still dead wrong and you don't need so.

And the Chinese exchanges charged huge fees for withdrawing fiat
bs number 2. Huge fees? e.g. okcoin.cn charges 0.5% - 0.3% for withdraw CNY. deposit by bank wire on the other hand is free. Is this fee you consider as huge? this is even less than the fee per trade on almost every exchangers out there. i.e the fee for sell&buy on btc-e is 0.2%*2=0.4%, 0.25%*2=0.5% for bitstamp. say you buy and sell 10 btc, you got your money in hand after 10*(0.5%-0.3%) fee on okcoin/huobi. you might end up paying 10*times more fee on btc-e/bitstamp.

Which probably encouraged shorts to push the bitcoin price down
hs. who pumps bitcoin? Chinese pumps bitcoin. from the day 1.

For now, Yes. it has been a long time that Chinese price are $20-$100 above USD/JPY/EUR/etc price. now we have the chance to trade the difference in gap vice versa.

We shall see of the PBOC crackdown changes anything...
Not only PBOC is currently on this matter, Police and financial regulator are also involved.