It can be vastly different if local currency is ok but the only thing affected in the capital control scenario is international trade with hard currency that is prohibited by a government who want to control foreign exchange outflows.
I don't know much about international trade, but I believe that China still has a huge trade surplus -- it still exports more than it imports (including bitcoins). Google tells me that the surplus dropped some 5-10% this year, but it is still hugely positive for China. Isn't that so? Then what controls would their government impose?
I don't think that the Chinese would invest in bitcoin as a way to escape a devaluation of the CNY, either. What magnitude of devaluation is expected?
I haven't studied the Chinese economy so I can't speculate on it that much. However, if there is any danger on capital controls for China, specifically for foreign exchange and definitely not CNY (as China controls its own currency, unlike Greece), maybe it is because people could be turning their bank deposits into USD or something, if they fear that there will be an even bigger devaluation down the road.
CNY => USD would seem to preserve wealth better than keeping it in CNY (if CNY is going to be devalued, say, 10%).
To some extent this could also be done with BTC, although BTC can be kept at your own digital wallet, instead of a USD bank account that is kind of fictitious, in the sense that plenty of governments around the world allow people to have USD accounts but are using them as their own foreign exchange reserve, and, in effect, practicing a fractional scheme with the USD of the depositors - so these USD are like "claims" rather than actual USD holdings. With a new law, all USD accounts could be turned to CNY accounts, or taxed, or, or, or, for "national interest" purposes.
If I was a Chinese worrying about CNY devaluation, I'd probably have options like these:
- turn my CNY into USD (cash, not bank account), swiss francs, euros etc
- turn my CNY into gold/silver
- turn my CNY into hard assets and investments, like real estate or serious stock
- turn my CNY into cryptocurrency
If we are talking about >1 trn economy, a couple hundred million USD that are turned into crypto, can easily fuel a small or larger rally.
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