It's not just negative news from Chinese government, negative news from anywhere including the US can affect the price and this doesn't happen only to Bitcoin only. I happens to other tradable assets too such as stocks, commodities etc. Markets always react to news as traders look to make some quick profits or look for opportunities of buying dips.

Have you noticed that such bad new about bans become rampant only when it's a bull run and never in a bear market?
Now you know why.