Yes, easy for the Chinese central government to issue fiats, such as the recent one banning plastic bags by all sizes of businesses, but local authorities frequently do not follow dictates of the central government. Therefore, a ban on plastic bags might mean little. At the local level it is government by bribery, or rather non-government due to bribery and corruption. If a business wants to continue using plastic bags, a bribe would do the trick.
Certainly there is a trade-off between paper and plastic. But, the idea that the Chinese government has is that their citizens will use fewer plastic bags and also use cloth bags as they did previously to about 15 years ago. China now consumes about 3 billion (!) bags per DAY! They are strewn over the landscape (like they were after Hurricane Katrina here on the Mississippi Gulf Coast). The government is banning the thin plastic bags by June 1 this year; however, the thicker bags still will be available, but stores must charge their customers for them.
The U.S. Olympic Committee plans to not allow American athletes to prepare for the Olympics in China, due to the horrendous levels of air pollution, about which the U.N. has declared China to be the world's worst. American athletes will be flown in for each event from, I believe, the Philippines.
By the way, Australia is also phasing out plastic bags by the end of the year. Wonder when the U.S. will follow?