FUD is always perfectly timed, isn't it?
I don't consider that being a bad thing. Because a surveillance system implemented in any exchange implies a sort of insurance that the government is giving bitcoin. Meaning anything that could happen to the money of the people in that exchange will be protected or excessive measures will be taken to ensure the well being of their users.
But it could also mean that China government will pick up the tab and will try to minimize the dumps when crashes happen and BTCiTcoin will not depreciate more than 10%, less than that with time or keep it going sideways till there is more real price discovery by real new buyers and not speculators that just throw with cash at the screen to artificially pertain to the illusion that some might actually "buy in to the new world" per say.
lol imagine the size of THAT bubble.
Well... that would make the Chinese government a net hodler.
And very few people will be incentivized to sell or gamble on their exchanges because no one will be sure or know when the price will drop/crash 5% - 10%. But... it will create a weird thing. Imagine CNY bitcoin being 1000$ more than the other exchanges. That will certain force or make people more attracted to China. And they will try to get money out of that country through certain ways or methods... in consequence that will devalue their currency and boost their economy by forcing people going trough loops. Because after they take profits once, they will want to come again and take at a higher price. Meaning that China will probably not care too much, because they will print money like hillbillies. And ultimately you will end up making some investment in gold/silver in China with the profits or some will open their own business that they will try to expand them outwards China to be able to draw in profits towards and outwards of China in a more legal fashion.
*edit: That will also make Chinese exchanges more appealing to westerners since there will be an incentive for insurance of the price. And that for China means attracting new investors to boost their economy through an inflationary currency system. And probably ultimately with time making their currency obsolete after that much devalue and moving 100%(or at least 90%+) of their economy in to BTCiTcoin!
*edit2: Meaning that they can devalue and store wealth without a loss of wealth after devaluing against the dollar or euro with their trade partners where they need to be very competitive to assure the same percentages of exports outflow, to keep the factories going, people working with a stable job, etc...
*edit3: Or they can export themselves the outflow of capital of that stored wealth for when they need to buy something they can't buy with their destroyed/devalued currency. Like food in need for their people.
Did you knew they have so many food shortages there in China?? ... like for example sunflower oil, olive oil or any kind of more exotic types of cooking oil is expensive AF!!!
... Why do you think they boil sh!t up that much?? 
