This is pretty much the whole story right here...
" NIFA official Li Lihui told a technology conference in Shanghai on Friday that a goal of Chinas monetary regulation is to ensure that the source and destination of every piece of money can be tracked. "
Bitcoin is the mortal enemy of '
tracking'. Therefore China is going to continue to assault Bitcoin from every angle. You can be sure of that.
China does not hate Bitcoin but many money smugglers are using bitcoin to transfer huge amount of money out and in without being noticed with the use of bitcoin. China is very strict pertaining to money laundering and they even set a limit as to how much dollars you can send out of the country. Since many exchanges in China have failed to comply with the KYC and AML requirements they are now closed. If only those exchanges have complied then there is no problem with the use of bitcoin and other cryptocurrency in China.