Yep,you can either opt to pay tax to the UK tax office or to that of China. However,if you choose the former,I advise you to make sure you are totally aware of the regulations that would affect you.UK tax inspectors are sticklers for detail.So,for example,you should find out exactly how many days you would have to be outside your homeland per calendar year in order to qualify for exemption from UK tax,should you decide to go down that path.I'm sure your bank can give you detailed information re that.
As for the employment regulations for foreigners in China,so far they have not been applied throughout the country.Not only that,but Beijing 2008 showed us they can be subject to sudden and unexpected change,just like British weather!
Good luck with your tax avoidance.Long may it continue!

I've been told by my bank that it is possible to state residency, ( tricky isue), of another country as the prime reason for tax avoidance. We fill in a form online and then wait for the response from HM Customs and Excise. If they agree, I will be much better off while living in China.

I recall that you would have to be resident in China for 9 or perhaps 10 months out of every year in order to avoid UK tax.That said,you would then be subject to China's tax laws,which,I believe are much more lenient!
Some members of the House of Lords had adopted the strategy you have detailed to avoid UK tax;they were resident in the Channel Islands,and flew to and fro from there to London.A long time ago,perhaps 20 years ago,there was a controversial article about that in a British newspaper.
You should also bear in mind that according to some posters on another ESL board, China is now rigidly enforcing the 5 year rule in regard to its FT's in many if not all of its provinces.Certainly, that is the case in Hebei province.That might well mean that FT's who have taught in the country for a 5 year stretch will have to go back to their homelands for 2 years before being able to resume their teaching careers on the mainland.
It's supposed to be so we foreigners can brush up our English, not that that's at all necessary in my opinion,as there is a huge gap between the English of native speakers and that of their Chinese students of English in any case.
I reckon there's a more sinister reason behind the rule,born out of distrust,to limit the time spent in the country by louwai,some of whom might be bold enough to engage in illegal activities against the Chinese government,along with local Chinese dissidents.