This will only concern Chinese exchanges. And in case this affect all the exchanges, some day or another, a decentralised exchange will pop-up and will end all this debate.
Im sure that China won't let their citizens to exchange and use bitcoin without any kind of regulations and control.
They might want to create centralized bitcoin in China, just by using law that affects crypto exchanges.
If they would suffer because lack of any exchanges, how it is possible to convert them into fiat?
The only possibility would be to do it on street, personally- face to face.
The thing is that the exchange needs to be somehow connected with the banking system, to transfer the money to their customers right?
I doubt there are buildings where you can personally send btc to the company and recieve cash.