I think your advice to Steve is generally sound so this response is not about to stand as some form of dispute.

The possession of a degree (in any discipline) is a requirement of the Chinese Government and not necessarily of schools. Many Foreign Affairs Departments throughout China, (though not all), are happy enough to approve the employment of a foreign teacher providing he has some other form of education certificate. These can be far removed from degrees. The successful acceptance of lesser certificates will depend on how good is the relationship between the FAO and the school(s) concerned. TEFL certificates are sometimes required but these are a schools-only requirement not governmental.

I suggest that Steve sends his resume to any school that he feels he may be suited to, even if they are wanting to see a degree. Many schools that call for a degree will overlook that requirement if the candidate has experience and an approach that they like. He should of course make it crystal clear that he does not have a degree and should make equally clear what educational certification he does have. Of course there are advertisements from schools where they too make it clear that they MUST have candidates with degrees and will not consider those who don't have one - in which case he needn't bother with them.

As you have correctly told him, he can legally obtain teaching work in China but to make it legal he must have a residence permit. In order to get that, a Foreign Expert Certificate has to be issued and without a degree, that issuance will depend heavily on the relationship between the school and their local FAO. Using a forged degree or certificate is highly risky as if it is challenged, the bearer can find himself in deep trouble.

Thus, Steve cannot legally work in China in ANY capacity unless he has a residence permit (generally, though incorrectly, still referred to as a 'Z'visa). In any case he would soon run out of time on his visit visa following which he becomes illegal even if he's a genuine tourist.

Finally, Steve must beware of Agents in his position. Many agents will jump at job-seekers who have 'lightweight' educational qualifications. They will promise the earth and tell him not to worry as they can fix it etc etc. Don't take any notice of that kind of claptrap. Deal ONLY with schools who confirm that they are duly authorised to directly employ foreign teachers.

Dave