People are trying to pull their money out of China, and in the process need to exchange Yuan for foreign currencies. China does not like this, because it causes inflation among other things, so it puts restrictions on exchanging Yuan.
Bitcoin is a way around this. If you are Chinese and can afford big clusters of bitcoin miners, you can mine bitcoin and exchange it for people's Yuan at a higher and higher price, driven by demand to pull money out of china.
"People are trying to pull their money out of China"
Meh. This is the classic story that mainstream articles about Bitcoin almost always repeat over and over. However on multiple occasions CEOs of Chinese Bitcoin exchanges have said they don't believe it to be true, based on how their users use their exchanges. In reality the Chinese just appear to like to invest/gamble/make quick returns more than Western markets. That and a combination of other factors (somewhat more lax domestic financial regulations + large market of 1.4 billion people + due to competitive reasons Chinese exchanges offer 0% trading fees + ...) leads to a bigger and more active Bitcoin trading environment in China.
Are the mainstream articles' claims less likely to be true than the statements of CEOs of Chinese Bitcoin exchanges that have pretty strong incentives to talk up the portion of their business that their regulators are less likely to be concerned about?
Your point is legitimate. However, if the Chinese trading volume (buys) was primarily caused by money flowing out of the country, we would see a correspondingly high trading volume overseas (sells). But we don't.
There is a grand total of $2 billion per year, worldwide, to be made in Bitcoin mining. This number will probably only go down.
The Chinese economy is $11 trillion. I don't think Bitcoin mining really shows up on their radar.
Now, Bitcoin trading... that can make a dent. A single block of a few thousand Bitcoins can circulate a hundred times a year and move many billions of value out of a country. It's also far harder to detect than a mining facility.
The entire market cap of Bitcoin ($12 Billion) is less than 0.5% of China's national foreign exchange reserves. This is not significant in anyway towards capital flight.
https://www.bloomberg.com/news/articles/2016-11-30/china-sai...
Bitcoin is a way around this. If you are Chinese and can afford big clusters of bitcoin miners, you can mine bitcoin and exchange it for people's Yuan at a higher and higher price, driven by demand to pull money out of china.