Not for Kingdom of the Crystal Skulls specifically, which wasn't developed until the 2000s. Doubtful but possible during the 1990s for a theoretical 4th Indy movie.
The following answer rests on an assumption, but it is an assumption with a very strong foundation. The assumption is that Spielberg would only consider bringing Lao Che back if Chiao was able to play the part. Of course it is possible to bring the character back with a different actor; however, this would be completely uncharacteristic of the Indiana Jones film franchise in which every single character appearing in multiple movies was played (or, in Sean Connery's case, depicted in a photograph) by the same actor. The character Marcus Brody did not appear in Kingdom of the Crystal Skulls almost certainly because Denholm Elliot--the actor who played him--died in 1992. Since the movie included an extended sequence at the unversity, it's hard to imagine they would not have used the Brody character if Elliot had been able to play the part.
Chiao passed away in 1999, and The Kingdom of the Crystal Skulls was not released until 2008. According to the Development section on the KOTCS Wikipedia page, Spielberg and Ford did not become serious about starting a fourth film until 2000 and the first script by Frank Darabont wasn't started until 2002. By this time, before the story was even written, Spielberg would have known that Chiao was unavailable. Script rewrites continued for three more years, and by the time KOTCS was an actual screenplay, it was six years after Chiao's death. Furthermore, even the early scripts were set in South America, an unlikely milieu for a pre-war Chinese gangster.
The Villains fandom wiki states--unsourced--that fans of Chiao had asked Spielberg to include Lao Che in the fourth Jones movie during the 1990s. At that point, Lucas was working on a concept involving aliens, but it was only in the idea stage. If there was some effort by Chiao's fans to lobby for his inclusion in the 4th film that they heard Lucas was working on, that could be the source of this rumor; however, I could find nothing to indicate that Spielberg himself ever wanted to bring the character back. Even if Spielberg had considered it, he would have been considering it for a theoretical fourth movie in early conceptualization by Lucas during the 1990s, and he would have abandoned the idea by the time Kingdom of the Crystal Skulls had materialized into a finished concept, because by then Chiao had died.