In the years I was in mainland China (2003-2008), I made occasional attempts at changing locations, but fairly quickly I noticed a trend: Cities/locations that are most desired by foreigners (Suzhou, Hangzhou, Qingdao, Kunming, for example) are the ones that usually offer the lousiest contracts/terms.

That's correct,Theo.Furthermore,Silverboy previously mentioned that some FT's holding doctorates were working for salaries lower than what they should be paid according to their paper qualifications at some key public universities here,even in industrial provincial capitals,like Taiyuan and Shijiazhuang.That had surprised him.
It seems to me that the high number of FT's applying for posts in cities popular among tourists or at key public universities is the trigger for Chinese employers to offer less attractive teaching contracts.
Personally,I've never sought such posts,mainly because of not having the necessary academic qualifications to compete with other louwai jobseekers applying there while also having been put off applying in the first place due to the excessive conceit of those Chinese teachers of English working at first and second tier public universities I've been unfortunate enough to have met by chance.
Even so,I think the contract offered by Suzhou Foreign Language school is an absolute disgrace.That school deserves to receive applications from only the bottom of the barrel of foreign teachers in my opinion.I hope the posts in this thread dissuade the more talented FT's from applying to there.