Your H1 extension will not be considered as timly filing and the outcome is not promissing. You and your wife most likely need to go back to China for visa unless your company can convince CIS that the delay is caused by uncontrollable reasons. You and your wife will be out of status after 9/10. Definitely can not work.
Suggest using premium processing to get a quick result.
Suggest using premium processing to get a quick result.