It is really annoying, but you can also buy items that are not tracked by the government with BTC by finding a dealer that accepts the currency (luxury watches, goods and other stuff) and then sell it for cash. 

Overall, I think that the taxation of crypto was inevitable since their attempts to suppress it ultimately failed.

I paid my friends in bitcoin (who were willing to accept BTC) for split bill meals.

Wow, what a surprise. China has completely lost their minds.