I think you're right to look at the move as a part of the larger geopolitical fabric. My initial thought when I saw the news was that a) the CCP is looking to protect against capital flight. Their economy has been in a bubble for some time, and an unregulated securities market is certainly a threat, especially as tensions rise in their corner of the world.

The good news is that they're working towards diffusing tensions w/India: https://www.msn.com/en-au/news/world/india-china-agree-to-pull-back-troops-to-resolve-tense-border-dispute/ar-AAqUD6v

And so I agree with some of the other commenters here, too, that this announcement might also be a way for them to bring some semblance of stability for future investors, i.e., their pals. They're very interested in cryptocurrencies, and so they want to make sure they don't get fleeced.