my guess: China will not allow ICOs but maybe after 10 years or so, blockchains and smart contracts will quietly infiltrate boring business use cases and financial services. especially if they can turn it into a centralized tool for control.
what better authoritarian tool could there be than a centralized ledger of all economic transactions, run by the government. in the name of reducing fraud/laundering/crime you could have absolute visibility and regulatory control on all economic activity.
EDIT: spelling
i dont drink the blockchain kool aid myself as a silver bullet for every problem, read IBM's hyperledger marketing materials and they try to make a case for centralized permissioned blockchain. ymmv.
but if millions of your citizens are using blockchains, as an authoritative regime, you probably will want to control its use. you arent particularly interested in the best tech solution to a problem. just control.
and lest anyone think i am abusive of china, i fully expect the US to highly regulate the hell out of this eventually ... if not now under the Tweeter in Chief, when the Dems get control again.
Being interested in tokens for their "features" not the price is very archaic. This also does not happen with stocks anymore: People hold for a few months/days/minutes, then sell, they don't sit on stock for many years like we used to.
My guess: China will allow ICOs after drafting up proper legislation and regulation. It would not benefit China's economy to blanket ban a new emerging technology. They just want to prevent crypto as a way to move money out of China, take a cut of the profit.
Another guess: Regulation will be good for established players (like Ethereum and 2016/2017 ICOs), but bad for speculators and newcomers. It will thus shoot past its intended goal of protecting investors: Those who like to gamble with money they can't afford to lose will find other get-rich-quick schemes unrelated to crypto. In Las Vegas you are actually sure to eventually lose all your money.