She’s a naturalized American citizen. She does not have dual nationality per China’s law.
The problem is that the same is not true for other foreign-born children who are adopted by Americans. Many of them do have dual nationality.
Dual nationality becomes a problem legally when said dual national is in the country of birth and owes allegiance to said country. The U.S. has only a secondary claim under international law.
Think about the Americans in Iranian prisons. We have no power to help them. While it may be far-fetched, imagine an American president is accused of treason while in his country of birth or conscripted or must serve on a jury or whatever forced obligation one can imagine.
We have to draw the line somewhere. Citizenship at birth is (likely) where Congress drew it. The FF were more conservative on the matter.
(I was on my way to sleep. I must stop.)
Now THAT makes sense.