Actually the official religion in China is listed as Atheism. However there are a lot of people openly practicing Buddhism, Taoism and Christianity that the government does not care about...just as long as they don't get in their face about it. or do said practice in the middle of main streets thereby blocking traffic and absolutely anything in Tiananmen is right out. That is the quickest way to get yourself arrested in Beijing these days.
But the Dalai Lama is a whole other issue, not so much a religion thing as much as it he is not accepting the party line (nor does he need to) and he is speaking out about what actually happened in Tibet, which goes against current Chinese Government propaganda. The Chinese have said they will pick the next Dalai Lama to which the Dalai Lama responded with I just might be the last Dalai Lama, I might not reincarnate again.