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For incoming applicants of visas, passport holders from the US (and likely other countries) allow the non-binary or X option.
Pretty much all official documentation in China that includes identifying information like certifications, medical records and visas only allow male or female in the sex/gender space.  The Chinese government would consider it a type of discrepancy or missing information if a person's gender is recorded as X on their passport.  And I don't think this standardization is changing anytime soon.
I am a teacher in China and I currently identify as transgender non-binary and my driver's license for the state I'm from lists me as X.  As soon as it's time to renew my passport I will have that updated also.

What are your thoughts on possibilities for China to account for this increase in inclusivity for non-conforming gender identities that exist outside of China while any type of progress within China seems non-existent?  Will it just remain a headache (or unavoidable reason to stay in the closet) for many LGBTQ foreigners interested in working and living in China?