The problem this time around is that the governments are trying to implement a total ban on Bitcoin and not only the closure
of the Bitcoin exchanges. They will try to block access to LocalBitcoins sites too, but as we know, new sites will pop up under
new names.
It definitely starts to look like it, but we shouldn't jump off the bridge this soon with our conclusions -- at this point there is a massive influx of articles from which its source can't be verified. It might very well end up in a market where only a few exchanges are allowed to operate in. It has been stated that the Chinese government is working on setting up a certain license to hand them to just a few exchanges in order to maintain its Chinese activities. It's not the first time Chinese news sources have been messing up big time with wrongly translated articles and stuff -- let's see how things are after a month or two.
I don't thing so china will not permanently ban LocalBitcoin or bitcoin activity I think all they want is to make it controllable or monitored. as you said within month or two we will see what were they upto.