For example, Cryptocurrency is claimed by China as commodity, not currency. But how can one get that commodity besides mining? By regulation, All banks or payment processors are forbidden to link with exchanges. This means one just can not buy bitcoin on an exchange, as he can't credit his fiat into an exchange in an allowed way.
This results in a funny situation. Exchanges, banks and traders are all doing openly, but not allowed by government. Do I understand correctly.
My question is, why the Chinese government banned Cryptocurrency but allows everything going?
AFAIK that is not correct, the exchanges are legal and people
can transfer money to/from exchanges via banks. In fact, the only way to move Yuan into or out of exchanges is by bank transfer between Chinese bank bank accounts. What the Chinese banks cannot do is buy or sell bitcoins themselves, or deal with bitcoin in any way. To the banks, an exchange are just another corporate customer, and they do not touch any bitcoin, they deal with the Yuan exclusively.
The Chinese government has effectively confined bitcoin to playpens --- the exchanges --- where it can have no significant effect on the economy. At that point the PBoC apparently stopped worrying about it.
A commercial transaction always has two legs, the client sends the payment and the merchant sends the goods/services. Even if the first leg were safe and anonymous (which is very hard to ensure), if the transaction is illegal the government can easily catch the customer by the second leg.