From what I can find of official information, the Czech Republic has suspended the processing of visa applications and issuance of visa at the embassy in Beijing and the consulates in China (Shanghai, Chengdu) and Hong Kong. It is worth to notice that this restriction affects also non-chinese residents of China, who are now also not able to apply for a visa.
Some media have indeed reported that the visa ban applies to all Chinese citizens, but there is no official information supporting that and I believe these reports to be mistakes. It seems very well possible for Chinese citizens who are resident outside China to get a Czech visa from the consulates at their place of residence and there seem to be no ban for residents of China to enter the Czech Republic if they are already in posession of a visa.
Unless the Czech Republic is the main destination in the Schengen area, it should also still be possible for Chinese residents to obtain a Schengen visa from other consulates and then use that visa for travel to the Czech Republic. It will probably have little impact on actual travel patterns for a single Schengen country to impose restrictions as have been done here.