There may well come a day in China when a MA is a requirement for the public sector for foreigners, but I personally reckon that wont be for a long time yet.

I take it you mean a postgraduate degree, a master's, when you write MA. I agree with you. Even though new university graduates in the west are having a tough time landing an initial non-deadend jobs, they do not flock to the PRC in droves. Maybe there are two reasons: the western media portrays China in a bad light regularly is one. The other is that it takes people who are adventurous to travel so far from their homelands to China to teach. There are not many who would risk it for a biscuit!
As for many Chinese employers favoring job applicants with teaching experience, I'd say this is because they have learnt this through experience. Perhaps some of their former FTs who hadn't taught before coming to China didn't teach well after arriving here.
Strangely, the original poster has removed his post. That's why I've decided not to post in this thread in the future.