If moving for the island works for you professionally/healthwise (depending on transport to the nearest maternity hospital, I might wait until after delivery of #2
), I would move there in a heartbeat. No elite preschool or primary school and no extracurricular option can beat the developmental advantages the exposure to nature and clean air will give to your children. Secondary, possibly upper primary, is a different matter, but they would have to commute to the mainland anyway (and I suppose you could always move back). Also, as you say yourself, organizing extracurriculars a couple times a week on the mainland (say, dance at 5, an instrument at 6) is feasible. the low stress environment might make it even easier for them to devote mroe time to practicing, for instance.
Imagine being stuck in a highrise all day with a new baby - shudder!
There are two factors I might consider: Will you presumably be staying in the city/country until your children go on to post-secondary education? because it depends on this really how important their proficiency in Mandarin and their shot at a good secondary would be. From what I know of international schools whre I live, admissions requirements tend to be less stringent for expat kids who are fluent in English and really need to be in the system for family reasons (ie a move back into their home country or into another country is anticipated), but this might be different whre you live. You do not mention whether international school would be cost prohibitive. But you could probably save a lot by moving to the island and sending your kid to school there for primary.
Waldorf school would not work my family, but again, mileage may vary, and for preschool it probably does not matter. Depending how important fluency in Mandarin will be (again, comes down to whether you anticipate staying in the city for good, for yourself and your daughter, for whom any English speaking university/jobmarket in the world presumably would be an option) you might want to arrange for tutoring in Mandarin, or a tandem with a local Mandarin-speaking family who would like top expose their kids to native English speakers. I may not be correct in this, but written Chinese would be the same whether its Mandarin or Cantonese, right? So with the local school, she'd get at least that. I have also read that learning Mandarin orally is not actually that hard, that it is having to learn the characters that throws native speakers of a Western language that uses the Latin alphabet. I'd love to learn more about this, if you care to elaborate!
And lastly, I cannot imagine that the local schools can be completely untouched by the competitive environment in the city they will eventually send their students to for secondary schools. they must have some track record of placing international students if they have a sizable international community.