Will my future son/daughter get Chinese citizenship as well because of his/her mother (my wife) being a Chinese citizen?
No. This is because your wife is a Permanent Resident of Australia. The only way your child could be a Chinese citizen is if they were born in China, as long as your wife does not become an Australian Citizen.
However, under the Nationality Law it is still possible for a person to have dual nationality of China and another country at birth in some circumstances.
For example:
If they were born in China, to one Chinese-national parent, they are a Chinese national at birth (Article 4). If their other parent is a non-Chinese-national, they may acquire another nationality at birth by jus sanguinis from that parent.
If they were born outside China, to one or two Chinese-national parents who have not settled abroad, they are a Chinese national at birth (Article 5). They may acquire another nationality at birth by jus soli if they were born in a jus soli country, and/or they may acquire another nationality from their other parent (if only one parent was a Chinese national) by jus sanguinis.
However, one does not have Chinese nationality if their parents (with Chinese nationality) themselves settle permanently outside China. This means in general, most second generation overseas Chinese ("ABC" or "BBC") and most South East Asian nationals with Chinese ethnicity are not Chinese nationals.
From all of my research, the best option would be to have your child born in China. This would ensure them Chinese Citizenship and Australian Citizenship at birth. They would technically have dual citizenship until they become an adult which at that time they should be old enough to make a decision regarding which Citizenship they want to keep.
Trust me, I've done a ton of research on this topic as my wife and I are planning on having a child soon as well. We've decided to have our child born in China for the reasons mentioned above. They are guaranteed U.S and Chinese Citizenship at birth. They will be forced to choose later, but I figure that's something my kid can decide for him/herself. I don't want to force my kid into a corner.
It just probably depends if they see my future child as a Chinese or Australian. I could register my child with the Chinese authorities to ensure my child is recognized as a Chinese.
If you plan on having your child born in China, make sure you have a Chinese marriage certificate before your wife becomes pregnant. This allows you to register the birth with the proper authorities and guarantee Hokou for you children.
If your Child is born in Australia, the Chinese government will recognize them as Australian Citizens and you cannot register them as Chinese Citizens or anything of the like. To the Chinese Gov. they are foreigners.
Summary: If your kid is born in Australia, they are not Chinese and will never be Chinese. If your kid is born in China they have the option of being Chinese or Australian.
