Ambient air quality throughout all of Hong Kong is bad. You can minimize the roadside air quality by living away from certain 'canyons' of buildings, such as Robinson Road and Caine Road, but overall if air quality is a go / no go issue (i.e. kid already has respiratory problems) than it's not a matter of where to live in Hong Kong but whether you should even come to Hong Kong.
There are parts of the Midlevels that don't have the 'canyon' effect, such as May Road, Tregunter Path, Magazine Gap and Stubbs Road. You could even consider some parts of the Peak, such as Barker Road, though that may be outside of your budget.
How committed are you to the school? Is there another option somewhere else (perhaps Repulse Bay). The commute to the airport is going to be quite time consuming from Repulse Bay.