no government required, you managed to fit a lot of stereotypes in there congratulations -
i rather see China as a leader of free markets is many aspects, it is of course a chaotic and schizophrenic free market.
but nevertheless more open with much more competition than the "west"
that's what i am thinking about, China didn't totally ban bitcoin, they just reserved their stand, and there is large volume of transaction in BTC exchange,
i think China doing so is to protect their CNY, that's quite reasonable, every country will try their best to protect Fiat.