Lamar, I am very sorry to hear about this and I have to say you are very unlucky. Here's my suggestion:

Find out where the local Foreign experts office is and get someone who is fluent in chinese to go with you there. You must find someone who isn't some colleague or student who just wants to use you to further their own gains, for they will surely not put in a full effort. Find someone who likes you as a person there and ask them to go there with you on a specific day.

Once you're there, you need to explain in detail what happened and ask them to document this. I believe the Foreign Experts Office is tied directly to the GongAn so you must demand a police report and keep a copy of that with you when you go to the bank.

Go with a chinese (someone preferably from the foreign experts office but this is a remote possibility. Go with the person who likes you). Ask to speak with a senior manager at the bank. Tell them exactly what happened and show them the police report. Ask for immediate reimbursement and get EVERYTHING DOWN IN WRITING from the bank manager. Try and get the name of the person who damaged your passport and make them come to you and apologize to your face!

Here's the key part: Ask the bank to PUT DOWN IN WRITING that since you will need to replace your passport, they are then responsible for reimbursing you since this will cost X amount of money (make sure you find this out before hand) from the embassy. Lamar you will need to call the embassy ahead of time and set up an appointment with a representative there who will get on the phone at a certain time. At that time you need to be at the bank with the bank manager and have the embassy representative speak to them directly. Make sure you get the bank to write down the EXACT amount back lest they try to bullshit you later. Try to do this on the same day that you bring the police report into the bank to show the bank manager.

Banks will not care if they do things like this in china. In order to combat this you have to make sure you are speaking with the person at the very top of the bank. I think there's a good chance the bank will play "pass the buck" if you just play nice with them. Since they figure you are an expat they can just move things along like everything's okay. You need to set the example and kick up a shitstorm so they receive the proper punishment. You need to act fast, the faster the better. If you don't soon they just might very well get away with it.