Great question - I have heard both of the options you mentioned as possible explanations for the decline of new cases.

Personally I like to give countries the benefit of the doubt. As difficult as it sounds to quarantine and stop the spread of a virus in a country with 1+ billion people and multiple 10M+ cities, China is one of the few countries that could actually pull it off.

At the end of the day, the option you pick probably depends on whether or not you trust the numbers provided :)