Thanks.  I do read Chinese, and to me it is a little vague, and not clear if this applies to BTCchina or not.  This was part of the directive against "3rd party payment systems" (e.g. AliPay) handling bitcoin.  The CEO of BTCchina also does not seem to think it applies to them (though he left the door open for future "clarification" from the government).  BTCchina is registered with the government, and does "Know Your Customer"  (requires ID from customers). 

We shall see in the next few days... but regardless the "underground" localbitcoins style market for bitcoin is already huge in China, and will grow bigger if the government forces it underground by making it too difficult for casual users.  I see this as an opportunity to increase my profit trading bitcoin OTC in China   

In the meantime, I am using this time as a buying opportunity!