There's been a bit of an ongoing debate on what the general practice is in China for duration of contracts at public schools. I finally tracked down this statement at Middle Kingdom Life:

Contracts at public schools and universities are typically 10 months in duration for the initial contract and are then extended for 12 months thereafter, such that foreign English teachers will be paid for the summer break if (and only if) they renew their contracts. However, foreign teachers with advanced degrees and several years of teaching experience in China may be able to negotiate an initial 12-month contract.

So, there it is. The 10 month contract is normal for first time, short term gigs (I WAS WRONG ABOUT THAT!), unless one has more qualifications and experience. But if one is continuing at a school it is (or WAS) customary to extend the contract to 12 months to cover the summer period. That makes enough sense to me, and explains why there are so many 10 month contracts. Therefor, it's only really a SCAM if one is continuing at a school and not getting the summer pay, and probably unfortunate for those of us who have the qualifications and advanced degrees to warrant not getting a couple month's worth of salary lopped off.

Lastly, contrary to some general consensus among expats, it isn't a take it or leave it situation. If one has the qualifications one CAN try to negotiate, and if one is staying one they SHOULD be covered for the summer vacation, just like all the other resident teachers.