You're right, that's why china is a very big country because they have to make sure everything their people do has advantages to their country which is very nice for a country but it's very bad for the humanity freedom.
Although they could owning bitcoin without their government permission, but disallowance to crypto will bring bad impact to if all countries doing the same and make cryptocurrency will less valuable in the future.
Some people said it's just a FUD but as long we know, china has their own digital currency e-yuan and maybe they make sure their people are investing on thir own currency instead of cryptocurrency