I believe China simply wants to reboot the crypto industry into one that they have oversight on, the same approach they took with the Internet.
This would be a good thing if it would be better then Blockchain i would go with it.
Bitcoin mining wastes a lot of electricity,
Well in fact China is getting his polution levels lower each day now which is a good thing. Maybe that's some reason why they want to ban mining to prevent some "additional polution".
They want to ban mining, but they still allow some company or individuals to mining bitcoin. I guess that they are not serious with that because they see the potential to mining bitcoin and the other coins. They will do this again and again in the future, and even they stop or ban the mining process, I think it will give a good impact for the other because one big competitor is reduced and it gives a chance for the other to do mining and try to be the next bigger mining company.