Thanks for the replies and bravo GinFizz - That is definitely the best explanation of the scenario I have seen in years of trawling the internets researching the issue ^

I'm at least lucky I'm not Canadian. Their view on this sort of thing is that a mixed nationality child cannot apply for a Canadian visa because they are eligible to hold a Canadian Passport.

A Canadian friend of mine is expecting later this year and he is in knots about it all. Like me he has plans to be here long term, and realises the moral and logical dilemma of someone being born and raised in a country they consider home, only to find later on they do not have access to subsidised Higher Education, Job restrictions, unable to get Credit Cards and Mortgages etc... and everything else that comes with being a foreigner in China.