A z-visa is the proper way to enter China to work now. Before you used to have to keep it while you worked along with a residency permit, Foreign Expert Certificate, and Medical Check (they call it body check) booklet. Now, the Z-visa is the proper, and is supposed to be, the only way to enter China when going to work. Now, we all know that the right people can get anything done here.

Within 30 days of arrival on a Z visa, it must now be replaced with a residency permit, which is good for unlimited multi-entries into China for the duration of its dates. The z visa is cancelled. The residency permit is placed in your passport. This started at least by July in 2005, when I had an expiring residency permit and z visa replaced with only a new residency permit, all in Foshan. They also replaced the medical certificate and FEC.

If your contract is up, you need a letter from the last employer in order to change the residency permit from one to the other location. I think, but am unsure, that it needs to say "xyz has satisfied his contract with xxx company". I am about to go through this hassle myself. The company has said they will convert my existing residency to a 30 day visa, but this may not work for me. Will advise next month.