They use the term "chinatown", but it is not the same concept as in America. It is just an area of that industrial park where there are some Chinese wholesellers who provide the goods for the many Chinese retail shops. The area in Madrid closer to the American concept (i.e. part of the town where the majority of the population comes from China) is actually where you say: near La Latina Metro station and more precisely the North end of Embajadores street and Meson de Paredes street. There are wholesale shops, too, there.
The retail shops are spread all over the city and, basically, are of two kinds: "todo-a-cien" (cheap and small items for almost every purpose, from cutlery to hardware, plastics, plant containers, little toys...), or convenience stores (groceries open 365 days a year, from about 10 am to midnight or even longer).