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.
You started this thread almost an year ago and the Chinese bank is yet to come up with their coins but the government always have a strong grip on the citizens and they like to control them and with an oppressive government like them they do not like to give any freedom and the bitcoin market gives them the freedom to trade and it is not surprising that they want to take control over that.
They will not just come up with their coin like that without really doing market survey to be sure that their citizens would not really disappoint them by rejecting to use the coin, which I know that even if they impose it on them, people would still prefer to use bitcoin because it is decentralized and really gives them the privacy and control over their own coin.
If they accept any coin that china provides, they will still be under the same bondage that they are with fiat, and who would not prefer a decentralized coin to a centralized coin because I can assure you that any coin that china will provide its citizen and the world at large would strictly be coin they can have pure control over, which will make it very impossible for china coin to sideline bitcoin.