I don't think the issue is a hard fork which would be bad for Chinese miners. It's more about Chinese miners being able to insert transactions. For example, the Chinese government getting all miners to commit to transferring some of the big 'unknown' blocks in the Bitcoin chain into Chinese government control for 'protection'.

That would cause minimal disruption while giving the Chinese government a massive payout. There's a lot of value for China to push that.

EDIT: This would actually cause a hard fork. Any non-Chinese node doing verification would pick up the illegal block and discard it, creating a fork between Chinese and non-Chinese -- with the Chinese fork having the majority of processing power behind it. At that point, you'd just need a Bitcoin client change to exclude the Chinese fork, I'd guess?