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job switching before starting work visa process (Shanghai)

I have a question with regards breaching a contract wihen work visa process hasnt started..

Basically, I have already signed a contract with a school in Shenzhen (scanned it and sent it to them by email) but the visa process has not started yet. Whilst I was waiting for medical documents, I was offered a better job by EF in Shanghai before I sent the visa documents and now I really want to go for the EF job.

The other job in Shenzhen are now threatening me and sent me below Skype message:
'This means if you don't come, the school are required to report you to the Chinese office of Foreign Affairs. And you cannot come to work in China in the following years. Sorry about this.'

Is this true? Can they do this even though the visa process hasn't started yet?

I would appreciate your quick reply!

Shanghai Forum