I don't think this is anything new. If I'm not mistaken China already did that in the past. I think it will of course affect the price of BTC, because of all those panic sellers, and all of those that just use BTC to trade. The thing is, that China, although having a lot of users with BTC, does not really control them, and are not even banning them. So BTC will continue to be a good way of holding value. So the price will go down a little, and them will just recover, because the guys that know the true value of BTC, will just hold them around the world.
Apparently, it seems that government of China has banned bitcoin in their country irrespective of the fact that their country have a huge number of bitcoin users. They cant actually control people from using bitcoins because they bitcoins are the most secured and exponentially growing currency which is accessible to anyone from any corner of the world.