I think China is seeing all the digital assets infrastructure being built in the west and they don't want to be left behind. This crack down is probably designed to clean up the exchanges before they normalize and regulate digital asset trading.

Also, they desperately need to find another industry to help bring some growth. They've pumped an incredibly amount of money into the market but it's not producing the same results as it did in the past. I bet they're going make a strong effort to grow there way out of economic stagnation by investing heavily in blockchain.