They would surely fail because cryptocurrencies are decentralized which means full control isn't possible.They might able to control some aspects but on general matters then its an impossible thing.I do agree that they had already make lots of decisions towards crypto banning and prohibiting them but still they do end up on failing and now they are re-considering and this adoption or regulation of ICO would be a good news since we do know the capability or involvement of China into things.
How exactly would you define failing though? ICOs are pretty much dead in China, and their crypto trading volume have plummeted severely from their pre-exchange ban levels. Maybe they failed in controlling them completely, but I'd say they're pretty successful in suppressing it.
It's sad, but most people wouldn't dare risk breaking the law by going against bans, so they would more or less be successful, even with some few enthusiasts being able to crawl through the cracks. They can't stop crypto fully, but they can make you work for it a lot harder than you reasonably should.