passport stolen, how to get a new Z type

I am a US citizen and arrived in China on a Z type on December 28, 2014. I had the z type in my passport, but it is the first visa that I recieve via the Chinese consulate in the US. After my arrival, I was then required to go to the local police station to register and they would convert the Z type to a one year, multiple entry type. My passport was stolen on January 2, 2015. During that time, I did not convert the visa to a one year, multiple entry because it was public holiday from Dec. 31, 2014 - January 3, 2015. I reported the loss to the local police, recieved an official letter stating that I had reported the passport stolen, then traveled to my regional US consulate to apply for a new passport. I should have the new passport in another week. Here is my problem. I am being told that in order to get the new entry permit, I must now travel back to Chicago, IL and apply for it through the consulate, which will require a very expensive plane ticket, then fly back to China, then register with the police. Can this really be correct? Is it not possible to do this in Hong Kong or via express mail? Any help much appreciated.