China want to dominate the financial world, but they also do not want to lose control over the censorship of their citizens. They will most probably follow the USA example of implementing strict regulations for the
use of crypto currencies, as a currency. The AML|AML regulations in the USA will look weak compared to the regulations they would apply to Bitcoin.
They will lose out to the rest of the world in retail and new job opportunities, if they do not accept a global currency like Bitcoin. The trade off, will be to sacrifice privacy for use.