Blockchain is seen as a key future industry in China and I think regulating ICO's is actually a positive development.

Sure, it caused a short term dump (i.e. NEO at discount prices), but NEO will be in a great position to capitalise on "regulated" ICOs. If China is the first country to setup a functioning regulatory environment for ICOs, I expect NEO to pump like crazy from trader's expectations alone, not to mention when people actually start buying NEO to participate in ICOs.