I often hear people quoting that some country (most of the times China) is positive towards blockchain and are thinking to using it in their country, so they are also positive towards Bitcoin.
This is just a myth. To be honest Bitcoin and Blockchain are separable. Blockchain can sustain without crypto but crypto cannot without blockchain.
In recent times Bitcoin moved from 7k range to more than 10k may be with the news of China president talking about blockchain. Then people were saying that China is positive towards crypto but things were not that good. And now things are on the same page again.
So burst this myth that where blockchain is Bitcoin will also be there.
I doubt the Chinese government wants to create a digital yuan that will be decentralized and run on a blockchain in order to provide financial freedom for their citizens. Most probably they are building a centralized ledger, that will give them absolute control on all accounts. They will have every transaction recorded on a centralized chain where only authorized government personel would access. The Yuan-chain will be controlled by the government and not consensus mechanism.
Chinese communist party will claim that corruption will be reduced this way, while they will actually acquire totalitarian power on all economic activities for the next hundred years. It is basically a dystopian financial future for the chinese population.