The composition of Chinese bitcoin demographics:
Honest money/middle class money: 10%
traders: 10%
Crooked money: the rest
Chinese money is synonymous with crooked money. All it takes is one official/business man, to start this entire rally. Officers have been caught with over $300 million dollars of cash, all from ill gotten gains.
The government is moving towards prohibiting/outlawing bitcoin because it is NEEDS to save face by stopping corruption. Corruption is so rampant in the Chinese business
Quote
China suffers from widespread corruption. For 2013, China was ranked 78th out of 178 countries in Transparency International's Corruption Perceptions Index, on par with Serbia and Trinidad and Tobago, ranking less corrupted with tied countries Burkina Faso, El Salvador, Jamaica, Panama, and Peru, but more corrupted than Sri Lanka and most developed countries. Means of corruption include graft, bribery, embezzlement, backdoor deals, nepotism, patronage, and statistical falsification.[1]
For a country of 15 billion people, this is paramount. The government has to somewhat put a lid on corruption and prohibiting bitcoin is a way of saving face; to show to the world, hey we're not going to allow more money laundering... we are trying to make our country better. Whoever thinks that China feels bitcoin is a threat to the yuan... needs to come back to earth.