I'd seriously consider going for option one. It will set you up for the rest of your career, update you with latest ideas and most of all give you a course in how to be a professional teacher, not only the pedagogical aspect, but the other responsibilities involved. Good luck with whatever you decide!

Chengdu is a wonderful place, full of interesting things to do and a nice pace of life. A bit polluted, yes. Kids are fine most places though.
Not all of China is like that, and I've worked in many cities here. Have a look at the greater bay area, Guangzhou, Shenzhen, Foshan and Zhuhai. Not completely pollution free but nowhere near the scale of Chengdu or (an improving) Beijing.