Yes you're exactly right. Wealthy Chinese can purchase mining hardware and electricity using the local funny money, then sell the resulting Bitcoins for actual hard currency. The Chinese authorities have been cracking down but it's hard to stop completely.
I think it's more than they're leaving it in bitcoin. For now this is more secure than leaving it in local accounts where the predatory State has access to it, or where it can be confined by sanctions, etc.
Later... someday or sooner... throw it through few a mixers, pass it around a few times, and, sure, it could become capital again, or convert to another currency, or stick it in real estate. But there's no need for that at this point. In some places the risk of losing 80% of it to the fluctuations of kleptocoins is actually better than the political risk, or the potential taxation burden.
