I reckon the People's Bank of China's does not appear to understand what the cryptospace is if their plan to sideline bitcoin is to issue a restrictive digital form of fiat. It will only be another token pegged to fiat that is similar to USDT. However, more dangerous.
And every other dunderhead poster here thinks the same thing. The number of threads that mention 'bankcoin will KILL Bitcoin' when all it will be is an infintely more toxic version of what there is already.
Combine China's social credit with this and they will have an absolute stranglehold over every conceivable aspect of everyone's lives. The 'enemies of the state' will find life totally unliveable.
In this scenario BTC would be a potential out, but even then if all the economy is Chinacoin and any traceable interaction between that and BTC happens then there goes the social rating of anyone who touches that too. It's going to be nightmarish and it's only just warming up.