Of course not everyone is in a position to obtain a z visa and the risk is down to the individual but teachers should be aware of the potential difficulties of choosing to work on anything but a residence permit.

Exactly! And that's why I'm surprised by the number of foreign teachers in China who put themselves at risk of being fined and deported by teaching illegally. Even worse, there are some foreigners stuck in Guangdong jobless, short of cash and holding expired visas, so I'm told. They'll end up in the slammer before being deported. A major difference between the West and China is that it's possble to get out of sticky situations in China by spending some money, eg doing a visa run after paying a fine. But in the West, that's not an option. Another thing is that unlike in China, you'll be in serious trouble if you're identified as a visitor to the West on an L visa seeking work, whereas that's not illegal for Westerners in China! Even for those of us who follow the correct procedures here visa-wise and RP-wise, we could still end up in trouble if fired and skint, meaning we can't afford the air fare home! There is not a level playing field when it comes to the assessment of foreign teachers in the classroom!
Teaching illegally in Beijing or Shanghai or Guangdong is risky, I'd reckon. But I'd never teach there, even legally, as there are so many foreigners there. This gives Chinese employers in the field of education there too much choice, and means it's very easy for them to replace you.