I taught in Yinchuan for two semesters a couple of years ago. I enjoyed the city and its people. You can do so too.

Your pay will allow you to live well enough there. As for withholding a deposit, you can take the view that your boss is helping you save some of your pay for a rainy day, which may well occur upon terminstion of your contract if the past is anything to go by. About your contract, follow it to the letter. You don't want to get into a dispute with your employer. Ningxia PSB will probably side with your boss despite his shortcomings if you dare to break your contract and that is brought to their attention.

Ningxia immigration authorities pack a punch. It's best not to fall foul of them. They'll take you to the cleaners given the chance to do so. They also have a bad attitude towards foreigners and fall rather short in the good manners department!