Why would they ban it when they can simply co-oerce the miners to switch from bitcoin to another altcoin, one where they have control over the devs, the hash rate and can use regulation and co-ercion to force exchanges to prioritize it? They could even use regulation to create FUD, get everyone to dump it, accumulate it when its low, and then release new regulations and news to make it pump, putting them in charge of an extremely influential digital currency that could potentially threaten even bitcoin?

If anyone from the Chinese Govt is reading this I even have a suggested name for you to use- Bitcoin Cash.