Houdini's act two recurrence -- lethal ties loosened (7)
'houdini's act' is the definition.
'two recurrence lethal ties loosened' is the wordplay.
'loosened' is an anagram indicator.
'two'+'recurrence'+'lethal'+'ties'='tworecurrencelethalties'
'tworecurrencelethalties' anagrammed gives 'CHINESE WATER TORTURE CELL'.
'loosened' is the definition.
Although both the answer and definition are adjectives, I cannot see how they can define each other.
I can't explain the remainder of the clue.
(Other definitions for chinese that I've seen before include "See 13" , "Of the most populous country" , "Foreign" , "Widely-spoken language" , "From Shanghai, say?" .)