Why is it that the stricter China's controls are, the more developed the gray channels become?

The reason is not mysterious but based on a fundamental reality: regulation cannot eliminate demand, only change the pathways through which demand is fulfilled.
Needs such as cross-border capital flows, cryptocurrencies, asset allocation, trade settlement, and family support have existed for a long time and often have practical rationality;
when official channels are restricted or too costly, these needs do not disappear but instead shift to more covert, higher-risk informal routes, just like water flow that doesn't stop when blocked but instead moves underground, flowing deeper and faster.
Thus, a structural phenomenon emerges: the stricter the regulation, the more active the underground alternative mechanisms become;
regulation raises the threshold and risk but cannot fundamentally eliminate the demand itself.
From a systemic perspective, when rules exist in the form of "strict constraints + limited supply," compliant pathways tend to become scarce, costly, and uncertain in approval,
this "poor channel" itself amplifies the gap between demand and supply, thereby fostering alternative arrangements.
Gray channels are not simply the result of resisting regulation but are more like byproducts of institutional friction, information asymmetry, and enforcement flexibility;
as long as this structural mismatch exists, underground pathways will not disappear but will continue to evolve, becoming more covert and resilient.