China banning bitcoin would have a huge negative impact on cryptocurrencies worldwide. But what if... that's exactly what the chinese government wants? What if this is all a scheme to short sell bitcoin?
And how would they run a covert war against it? An open war or public attack would immediately raise the defenses of everyone involved, from miners to developers, to bitcoin holders. But what if they played nice while all the while poisoning the well or setting the stage to gain trust. They could do this through third party companies (cough bitmain cough) which could cause damage to bitcoin by delaying vital upgrades and sowing the seeds of uncertainty and doubt.
It's entirely possible that in an already corrupt environment, the dozen or so individuals on the crypto committee may be convinced to make decision that benefit them personally.
Make a few impactful decisions at your day job, block a few exchanges, short bitcoin personally, profit personally. Wouldn't be hard to make a million or two if you knew of a price fall coming up in advance, there are plenty of ways to get leverage on the bitcoin markets these days.
China is an oppressive regime. It's standard practice for oppressive regimes to ban what they feel they can't control. If Bitcoin ever becomes really useful, they will be forced to ban it -- if they want to maintain monetary control.