I found this to be a huge problem in both Shanghai and Beijing (although worse in Beijing than Shanghai) on China Unicom. When driving along the 4th ring road, for example, data connectivity would drop every 1-2 km, even when the phone showed a full signal.

One of my friends said it's just because China Unicom sucks; he uses China Mobile. Another said it's because they give higher priority to locals' SIM cards than to SIM cards issued to foreigners, because locals are more likely to complain than foreigners. Yet another of my friends said it's because there aren't many people out by the 4th ring road (yeah right, it's still more populated than the Sunset District in San Francisco, and in any case I can drive down Interstate 280 without data connectivity to AT&T's network dropping every mile and that terrain is far more challenging to cover). Or does it have something to do with the fact that locals pay only ¥20 per GB and they literally cannot afford to put up decent infrastructure with the revenue they're getting?

It's maddening, especially when the data connection dropping means that the VPN has to reconnect all over again when the connection is reestablished. I've never had a VoIP call drop so many times over the course of just 5 miles of road.