Why China is cracking down on cryptocurrencies is obvious. US and some other democracies are doing the biggest ICOs in the world. AND THEY ARE CONTINUING WITH IT in some kind of regulated manner. China is a communist country, cryptocurrencies will free people of China's economic hold, which it can't allow. Communism is very strict with having state control over important items. That's why China also has many censorship laws.
Chinese users used Bitcoins to invest in foreign markets, which is somewhat prohibited in China and is allowed only under special conditions. Also, China aims to launch a cryptocurrency built by state to replace its other currency. So ICOs run counter to what it believes is its exclusive right.
