China is making a great mistake in trying to regulate something that supposedly cannot be regulated. Trying to centralize something that is supposed to be decentralized. NEO will find ways to succeed outside of China and that will be attained by making the coin more flexible in markets outside of China.
How do you mean it cannot (shouldn't) be regulated?
Blockchain shouldn't be regulated. Volunteer Crypto projects (not taking funds from people to get started) shouldn't be and can't be regulated.
But ICOs? The companies doing ICOs, taking cryptocurrencies and converting them into local currency to get started? These are still companies operating in common market where all companies follow some regulation. Why would there be different rules for them?