My wife is HK Chinese as well, she remits a portion of her own earnings to her family, and I have at times been dumbfounded and aggravated by their apparent ingratitude, so I can relate to what you're going through.
May I ask roughly how long you guys have been married? It's relevant.
> Its a difficult position as i dont want to interfere in family matters,
> however i do want to put an end to my wife being used and not appreciated.
Those two goals (stopping your wife being used without being appreciated and not interfering in family matters) are mutually contradictory and irreconcilable.
Relationships between Chinese parents and children are basically parasitical and are focused on transfers of money. The parents raise the children like ants practicing aphid husbandry. When an aphid is mature, the ants stroke it with their antennae and the aphids release their honeydew. Here, the adult kids set up an autopay arrangement to have money deducted from their bank accounts each month and transferred to their parents' accounts. Actually, all relationships here are dominated by money (e.g. the role played by red packets in most holidays), as you've probably noticed, but that's outside the scope of this thread.
If the amount that she remits to them decreased significantly or she cut them off entirely, to them, it would be the end of their world and they would likely lose their minds. Even getting your in-laws to show some gratitude towards your wife for the cash that she is funneling to them would require, probably, a massive fight with your wife personally doing battle with her parents and sister. They would strum every emotional string that they could, fling guilt at her like it was going out of style, and basically be horrible. They would also almost certainly blame you for putting ideas into her head.
I would say that your best bet is to ignore their attitudes and, as someone else has said, to convince your wife not to increase the remittance and to make sure that she discusses each request for munificence with you. Also, if you are on good terms with your family, you might spending more time with them and including your wife in those interactions.
Here's how things have played out over the nearly ten years of my marriage... Unbeknownst to me until later, there were intense negototiations between my wife and her parents before our marriage about the size of the remittance (it increased significantly) and she felt pressured to give assurances, which she gave, that it would continue forever.
After a while (a couple of years, IIRC), her parents began hinting (stuff like showing her their own household bills and complaining about prices of things increasing) that they would like a cost-of-living adjustment (COLA) to be made to my wife's remittance. My wife and I discussed this and decided to hold the line, so she ignored their hints. There was no fight. She just pretended not to notice, became less easy to contact during periods when they really pressed, and they eventually gave up.
When they saw that they weren't going to get a COLA out of her, they began trying to shunt any and all extra/luxe expenditures onto us. For example, at one point, they decided that they both wanted new phones, preferably iPhones. Another time, they hinted that they wanted us to replace one of their air conditioners. Another time it was a clothes washing machine. For a while, they wanted a maid. There have been so many of these episodes that I've lost track of the things that they've asked for.
We have bought them a television, given them our old (but shiny-new-looking) washing machine, and bought them things like MP3 players (for those, my father-in-law literally phoned my wife half a dozen times). That's on top of events like birthdays, where we're always the ones bringing the cake and nicest gifts, and holidays like Mother's Day, Father's Day, etc.
We have avoided taking on any new recurring expenses on their behalf. We didn't get them a maid (we don't have one ourselves), they now pay their own mobile phone bills, etc.
Gradually, my wife has come to question, more and more, the way that parent-child relationships function here. That's because she has noticed that my parents and family (they're not wealthy and we're doing considerably better than they are) solve their own problems and rarely ask anything of us at all, other than to spend time with them. When we do see them, there is very little talk of money and certainly no wheedling for handouts or expectations that we will take my family appliance shopping. Spending time with my family also doesn't always involve endless dining at mediocre restaurants, which is pretty much the standard HK family interaction. We do stuff together that, most of the time, doesn't involve eating or shopping.
Now that she has another model for comparison, she can see how strange many aspects of her own parent-child relationship are.