Too late, mate! You've no right to change your mind now. You should teach there, and put your
mistake in signing down to lack of both experience and information. If you choose to go
the dishonest way by not teaching there, you're giving the Chinese a bad impression of
Western culture. Despicable, in my opinion!

Well then it's a good thing you posted as anonymous, whoever you might be, since this gives your post far less credibility, and leads us to the belief that you work for a Chinese school, and are either a foreign sell out, or a Chinese person. Regardless, your advice is bad, and just plain wrong. The contract in question is not legal, and is demanding unethical, as well as illegal things, such as withholding the persons pay. Taking this into account, and the fact that no work permit or visa has been issued as of yet, the contract is not legal as of yet. Given that it was not legal in the first place, it would not be binding, ever. These seem to be things you missed "anonymous" in your self righteous rant about how this person is giving foreigners a bad name. Funny that you say this when referring to Chinese schools, businesses that have some of the worst business practices on earth. I would say that their trying to get this person to let them essentially take part of his salary for rather spurious reasons gives Chinese a bad name, certainly Chinese schools.

Let's not attack someone who is trying to be victimized here, or others for giving what is good, solid advice. Don't ever agree to let someone withhold your salary, especially in China. There is no good reason for such, and any school that would ask this is of low quality and can't keep teachers because of this. That they need to do something like this proves that. I think such a school should be worried more about what we westerners think of them, as without us they have no business to speak of.