If there is strong enforcement of the new law, then some of those unsavoury employers may be put out of business.

That's a very big 'if'. The rule of law in China doesn't apply in many places, especially at county level. I know that from personal experience. What Beijing stipulates is often ignored in the minor cities and the countryside areas. It's also ignored in some major cities, by the way.

As for some of those unsavoury employers being put out of business, I doubt that a fine of 10,000 yuan plus confiscation of the illegal profits that had been made by such an employer through his employment of a foreigner working on a non-Z visa, or with an RP for another area, will do that. I believe the proposed new penalties are still too light to discourage many non-Chinese from continuing to try to rude their luck by working illegally.