I doubt very much that increasing salaries greatly in the public or the private
education sector will solve the problem of filling the large number of teaching
vacancies with qualified foreign teachers of English

I suspect that you are right and I doubt that most schools will actually raise salaries significantly.

The Chinese government has determined that it is more important to control immigration than to enable non-teachers with white faces to adorn college campuses and Shopping Mall Language Lounges.

Whether or not this will limit Chinese students oral language development is another debate. My personal view is that FTs provide students a variety of glimpses at Western culture, but do little to improve their language skills. Xi Jinping is trying to eliminate the former and cares little about the latter.