It depends on the statement which is why I don't see any contradiction here. The statement that is circulating the internet these days is "China banned bitcoin" and "Cryptocurrency is illegal in China" both of which are lies hence they are FUD.
What is banned is using your bank to buy/sell cryptocurrencies. Using bitcoin (paying or get paid) owning and even trading it without your bank is legal; ergo bitcoin or cryptocurrencies are neither banned nor illegal.

Funny enough this same thing is true in many other countries. Google stories about bank accounts (in different countries) that were closed just because the account owner used it to buy bitcoin! But just because this was from "China" it suddenly becomes a big news.