Of course, they are losing on this opportunity to have access to a revolutionized technology that may potentially be utilized by more countries in the future. Like what most have mentioned, China is a communist country. This means that the government has absolute control over the properties and services that businesses offer. Since BTC and cryptocurrencies introduce freedom of payment, it is nothing but obvious for them to prohibit something that cannot be controlled or regulated.

I just hope that the loss of China means the gain of other countries. For example, El Salvador has already made BTC as their legal tender; and more countries have started to integrate BTC to their economics and financials.