There is no doubt that the Chinese government has increasingly been able to limit the number of FTs teaching illegally in China and to enforce certain qualifications for new Z visas. Multiple posts about this enforcement process confirm this observation.

My question is this: has this significantly limited the number of FTs in China and made it impossible for schools to acquire an adequate number of teachers?

Speaking for my current and prior University employer, one has 3 foreign teachers where they used to have 5. The other has been recruiting into November for two positions they wanted to fill for September.