The school is lying to you about the visa. Perhaps they changed the visa into a Z class one using 'guanxi' (contacts) last year, and now the govt is stricter, so this time they can't get one.

If the school is legal they should have no problem renewing your Z visa, you DON'T have to leave the coutry to do this.

Having said all that, I am a bit amazed that you weren't firmer with them *before* your visa expired. It is you who are working here after all, so you have a responsibility in this area too. Now you are up the creek, and the school doesn't have to do anything do help you.

Perhaps the thing to do is find another school who may be able to do something for you. Otherwise, you are in trouble.