It is more beneficial for China to use electricity for production than to mine bitcoin, so their decision is understandable.
Bullshit.
Your statement would only be valid if china had a national grid system like the US and most of the EU have. A national grid lets a country generate power in one area for use in another, if one area has too much generating capacity power can be sent to regions where there is not enough generating capacity.
China does not have a national grid so during the rainy seasons the hydroelectric dams are now running far below capacity because there are no miners to take up the excess power. With no grid system that power production is now wasted. That is why officials in Sichuan tried to get the CCP to allow mining to continue until the rainy season is over.