Where do you get the idea that the Chinese government 'embraces' bitcoin?
Is it because CCTV, a state owned media outlet, broadcast a special covering BTC? If that is the case, then I would say it is too early to determine what the government's stance is on BTC, but from every perspective I look at it, the government would be against it.
CCTV's censors might not fully understand BTC and allowed the special to air as the censors are probably told what type of material to censor and cryptocurrency is certainly a new enough topic that the people in charge of broadcast might not have known any better, on the flip side they might fully understand BTC and the government really might have given the go-ahead, but I really doubt this.
+1.
There's just no way a totalitarian government will like or endorse Bitcoin.
On the other hand, they understand the power of technology, nowadays they are much more tolerant toward non-political matters, fearing being cut off from the rest of the world.
It will be very interesting to see the role Bitcoin will play in this no-black-and-white-everything-is-gray society.