WeChat & AliPay already dominate digital payment, so it wouldn't be weird if Government create something similar with libra where WeChat, AliPay and other bank/payment service are the members.
I doubt the Chinese government is willing to share such an important slice of the pie with corporate entities. I don't see why China can't set up a national payment network competing with both WeChat and AliPay.
Major benefit for China is that they only need to update a few of their regulations putting these corporate payment platforms at a huge disadvantage. I'm pretty sure they can come up with something to slam down the competition.
Crypto and blockchain don't only benefit the people, but also the government as we have seen. It's only a matter of time before other governments will pull the trigger to create their own payment network.
Back in the days we had one stablecoin, currently we're on our way to having dozens of stablecoins, and in 5-10 years maybe hundreds.