No matter what China does to stop the trading of cryptocurrencies on exchanges, they won't be able to stop the OTC trading. On top of that one of the heads of their internet finance association has already come out urging Chinese regulators to put together some framework of regulations to support the development of digital currencies. In my opinion the chinese government is trying to protect their everyday citizens from being scammed by the more shady alt-coins, but realized in the process that they don't have regulations in place to really control bitcoin either.
I have a feeling that in the not so distant future regulations will come into play and China will once again be trading crypto, just not necessarily on the exchanges as they were.
You may well be right. Thanks for the great comment!