Yes. I have reams of experience on this issue. I believe that I can help you somewhat.
My wife is Chinese, and I am an American we have been married for around 15 years, and our first child will be born this summer. We live in Southern China in Zhuhai. My wife is from zhejiang province. We decided to give it Chinese citizenship. The reasons are...
[1] It is easy for the baby to become an American at any time. At least before they turn 18 years old. It's just a matter of paperwork at the embassy. Right now, every American baby is saddled with $65,000 in tax debt. To pay this, the IRS insists that they pay taxes to the American government, even if they never set foot in the USA. I don't think that this would be a good thing to give to the baby.
[2] Education in China will be very costly if the baby is not Chinese. By law, they would have to attend an "international school". The Chinese international schools are the most expensive in the world. It would be cheaper for us to rent a house in Switzerland, and fly the child there for classes at a Swiss school. Rates in China start at 50,000 RMB/month. I don't know about you, but this is way above my ability to pay. There are people that say that you can give your expat child a Chinese education. But, the reliance on good favor and red envelopes should never be counted upon. When in doubt, follow the law.
[3] Socialization and the education that the child would get in China is awesome. It far surpasses anything in the United States today. They would be fully versed in Chinese, and yet be able to speak English as that is what we use in the house. They would end up having life-long school friends, and not the lone-wolf every-man-for-himself attitude so prevalent in the USA. I have been monitoring the sad state of American schools, they are horrible with people graduating out of college unable to divide or spell properly.
[4] China is growing and will be a global leader. If not already. The best thing that we can give our child is a chance with a strong nation.
All that being said, here are some very important points. You said...
"...As I understand it the default as far as the Chinese authorities are concerned will be for the baby to be a Chinese citizen...."
This is false. It is not true.
Note that the child becoming Chinese is NOT automatic. At around 12 weeks you will need to go to the central hospital in the town where you live and provide a series of tests and register for baby citizenship. The most expensive is the "anti" test, which will run you around 1700 RMB. This test will determine if the baby will be healthy or not. If the baby is not healthy, it is unlikely that the hospital would approve the delivery. Going to the hospital and running the tests is called "getting the pink and white books".
If you want to have a baby in China, AND grant it Chinese citizenship then you need to act quickly. You need to go to the central hospital and get the "white and pink books" and run the "anti" tests ASAP. The longer you wait, the harder it might be for the child to get citizenship.
Now, we are using a "birthing hospital". That is where we will have the baby. The community central hospital is where you go to get the "white and pink books". They allowed us to go to our regular "birthing hospital" to have the tests done. All told, the test cost us around 4,000 RMB, and the paperwork and documentation application ran us 500 RMB (plus taxi etc.). Once we ran all the tests, everything was set and now we don't have to go to the main community hospital any more (that I am aware of.)
This central hospital will need for your Chinese wife to transfer parental and familial records to them for approval. This is a simple procedure, and most people use friends or family to take part in this task. In my wife's home town; Wenzhou, they have a Wechat APP that was super easy to use and worked out fine.
If there is one point that I must stress it is this...
Under Chinese law, if a baby is born in China it does not automatically obtain Chinese citizenship. You MUST get that book and you MUST get approvals. If you do not have these approvals you will not be able to get the necessary documentation for your child. All you would have is a hospital paper that lists birth date and time. The citizenship must be applied for in advance.
Good luck.