I think its very simple. They simply do not want a currency they cannot control. They want to be able to ban ppl from using, they want taxes, they want to be able to monitor every citizen. This cannot be done with Crypto. Therefor China does not want any of it.
He hit the nail on the head. China wants to control the flow of money within its borders, as do all states so its not really a conspiracy. China will allow the exchanges to operate but they will have more stringent reporting in place which is not entirely bad. There are certainly pros and cons.