The china village is obviously inspired by a chapter L. Frank Baum interpolated into The Wonderful Wizard of Oz, in which Dorothy and her companions visit a China Country on their way south to Glinda’s palace. In that chapter, Dorothy wants to take a China Princess home to her aunt but is dissuaded. In the movie, China Girl demands that Oz take her along on his adventure.
There are various ways to read the character’s behavior in that scene. On the one hand, China Girl is insistent on her right to go on an adventure. On the other hand, she casts herself as a fragile little creature who shouldn’t be left on the Yellow Brick Road alone. Of course, she is a fragile little creature; we just saw her legs broken, and she’s less than a foot tall. China Girl clings weepily to Oz’s leg, but as soon as he agrees to take her she trots off happily. I think it’s clear that China Girl’s behavior is a ploy to manipulate Oz, the master manipulator. But in that effort she invokes gender stereotypes.
During the movie’s climax, China Girl plays an important role, bravely bringing Glinda her wand. (The fact that China Girl doesn’t use the wand herself implies the magic of this Oz differs from that in Baum’s Oz, where most magical tools can be wielded by anyone who holds them.) She’s also one of the two characters who asks anything specific of Oz beyond regime change, and ends the movie as his informally adopted daughter.
Illustrator Ben Wood noted a resemblance between the design of China Girl and how John R. Neill drew Dorothy in later Oz books, as he showed in the image above. He wrote, “It was a smart way to add her in without really adding her.” I’m not sure that’s what the moviemakers had in mind, but China Girl does provide more interest and, ironically, someone to identify with.