Why would anyone in China still want to buy bitcoins when this announcement demonstrates there is little hope for them there?
AFAIK, there are no restrictions on who can create an account on BTCCHina.
We don't know whether the selloff was actually caused by Chinese traders.
Even if you can create a BTC-China account. You won't be able to withdraw to a chinese bank account anymore. That breaks the idea of an online exchange. Only localbitcoins china would work.