I've never been there, but I believe you are just in culture shock. It happened to all of us, even those of us who thought we were prepared. Your students are also very shy, especially if they are in High School or College. This is normal and expected. Most of them have pobably never had a foreign teacher. They feel like their English skills are bad and are nervous to speak around you. This goes away quickly though. I tell my students at the start of class that I understand they are nervous and I can elate because I was nervous to speak Spanish when I was in school. They can relate and they will open up.

One of the things I noticed a lot was something I refer to hello and runs. Its where you will have random people yell hello to you and not make eye contact so you don't know where its coming from. Chinese people can be very sociable, but it takes time for them to build the confidence to speak to you.

About the smiling, they will smile when you try to speak their language or when they see you can use chopsticks. They appreciate it. A lot of the people lived hard lives working in the fields so when you see the old people walking around, its because manual labor takes a toll on your body and wheelchairs or canes are not widely used. It may appear to you as though they are unwelcoming or unhappy, but they are actually just as interested in you as the younger Chinese.

Just know its normal for Chinese to stare also, they don't mean anything rude by it. If you have a good job, good school, then just hang in there for a week and you should adapt to your surroundings.