I am a professor of Chinese Studies at a shitty American University, which I admit doesn't sound like much, but still pay close attention.

You need to get your child's passport immediately. International child kidnapping by parents of East Asian decent is a serious issue and their largely xenophobic governments will rarely raise a finger to help foreign parents hoping to see their children again. In not just China, but Japan and Korea as well, there are strong prejudices against foreign (esp. white) men who marry local women that pervade throughout their societies, and western men whose wives have taken their children "back home" can experience incredible difficulty trying to see their children again.

China is neither party to the Hague Convention on the Civil Aspects of International Child Abduction, nor are there treaties in force between China and the United States dealing with international parental child abduction. Therefore, any judgements or custody orders you obtain from an American court are not enforceable in China. Moreover, China is not governed by the rule of law, and thus its judicial system functions as little more than a rubber stamp for local government entities. The worst case scenario is that if your wife or her family has sufficient guanxi with the PSB etc. in the region in which her hukou was registered before coming to the US she could easily return to China, reclaim her previous citizenship and change your child's citizenship in a matter of months and that would be it. Chinese courts rarely allow children who are Chinese nationals to exit the country if one parent disagrees, even if that parent is judged to be an abducting parent in an American court. Children abducted to China are only permitted to return to the United States if both parents agree to their return, or if a Chinese court decides to uphold the decision of an American court to grant the aggrieved parent sole custody (which is highly unlikely to happen, especially if she has connections). You would likely not be able to see your daughter again, and an appeal from the US Embassy would likely serve to only harden the hearts of relevant Chinese agencies against you.