Even if China is manipulating the bitcoin, there is still a problem with mass adoption. Bitcoin has a long way to go before it can become a widely acceptable currency for everyday use and that is in face of competing crytos.
But if China is plotting to use crypto to help pay off debt by playing this game, then that means that there is a transference of debt to a new currency. In order for this to make sense, the wide adoption of bitcoin must be accompanied by real utility. Otherwise we are just renaming one currency for another and all investors will end up owning chinese debt.
I write about it in my latest blog : https://steemit.com/cryptocurency/@motoengineer/the-fallacy-of-bitcoin-is-also-the-certainty-of-steemit-s-success