The government introduced some rules that prevents banks or financial institutions providing bank accounts/currency exchange for Bitcoin Exchanges or businesses, and has instructed such organs to remove all such facilities that were acquired in the past.
This is an extension to them blocking some of the big name  sales websites from taking BTC ( ali.. etc), which was off the backs of some of these big names deciding they were going to start their OWN crypto-currencies/ token systems. ( I pointed this out in Jan, that changes were coming)

There are two main reasons:

1. Some  big players saw BTC/Crypto as a way to leverage cash from users to fund their business model, thereby bypassing market rules and money laundering laws.
2. China is aiming to float the RMB sometime in the next year, the last thing they need is some massive banking fraud related to RMB & BTC or indeed anything liable to cast  any sort of negative image on their state run banks prior to the flotation.
They would rather 3 Billion people speculate with cross rate exchange with RMB Vrs US$ than  BTC, at least with RMB it gets the cash directly into the banks.

I would expect at sometime in the future, the China government continues to squeeze the life out of BTC in China, mainly because their current action is following the path of how they normally deal with such matters… press leaks….gentle talking… gentle taps… exit strategy… Iron fist.

That said…. a number of businesses have been sneaking over the border into HK , where the rules are WAY more flexible, and where BTC is freely exchangeable as long as you follow the rules related to due diligence and anti-money laundering.

RF