The stated intent of the proposal is to create a closer peg, yes.
However, the proposal was created by someone who is known to be in a short position, at a time where BTS price is going down. I think it is obvious that a tighter peg may not be the only reason for the proposal.
Create bitCNY2 and let market decide what is better.
Actually another variant exists, under the name TCNY. It has been active for a couple of months now I believe.