Your grades conflict with his research. His research is more important to him than educating students and/or the accuracy of their grades (that is, if you accept that there is such as thing as accurate grading, which Chinese teachers most certainly do: it is their mantra).

You must have signed a new contract with the school, otherwise there would be no discussion of "summer pay" or breach penalties.

Adjusting the student grade amounts by some percentage is an hour's work in Excel. If you don't have the exams: tell him. If you do, just email them.

The students don't give a shit. You don't give a shit. The FAO doesn't give a shit. But if you're returning and you want your summer pay, do a few hours work and keep him happy.

If you are now too busy making plenty of money at home, you shouldn't be considering returning to China to be a migrant language worker.