1. Do I have to apply for AP and EAD altogether?
No.
2. Can I also apply for H1B in China, even if I have AP?
Yes and H1B visa is recommended. AP can be used as back up in case visa is denied.
3. If I use AP for re-entry back to the US, does my status automatically change from H1B to EAD?
No. As long as you don't use EAD for work authorization (I-9), your H1b status is ok.