+1. In my opinion, the Chinese government has effective control over the price of bitcoins right now. Obviously they can't dictate the price but, if they decide to restrict bitcoin trading, the price would plunge.
Putting their wealth into Bitcoin isn't putting it into USD - on the contrary. The Chinese exchanges are all in CNY, dollar isn't mention there at all, which creates a number of issues like psychological levels being different and CNY/USD ratio varying on its own.
China has implemented capital controls to prevent individuals from moving large amounts of wealth out of China. See http://www.globalpost.com/dispatch/news/regions/asia-pacific... for some background (or just do a Google search for china capital controls).
A Chinese citizen could conceivably bypass those controls by (1) depositing renminbi (i.e. CNY) into a BitChina account, (2) buying bitcoins, (3) transfering them to a non-Chinese exchange (e.g. MtGox, BTC-e, BitStamp), where they (4) sell them for USD.
This is true, but both BTCChina and OKCoin have no option, but to start working with the Chinese government (BTCChina already started) and will provide control mechanisms, which isn't necessarily a bad news for Bitcoin as people try to present it. Also, due to major mining operations happening in China, there's inflow of capital to China, so, I don't think the government will have a problem with that.