1. I think China want to temporarily crash the market so they can collect more BTC (and other coins dirt cheap) before announcing that they are officially adopting. At that point BTC (and other crypto) will sky rocket.
2. They don't want their citizens to trade cryptocurrency and earn (relatively easily) in fear of losing their cheap labor force. They will then try to make it as difficult as possible for it to flourish in their country.
Which is it???
first option can be possible as we knew how Chinese people rally working hard for this currency being adopted to their country and the easy way to create panics and to hold as much as they can is to bring this issue in the national public, so while other people start to collapse support from behind will start and collect those dumped coins.