Yes I am in this situation. Although technically, it's no longer a Z visa, which is used to enter the country only, and is really a Residence Permit, which allows you to stay after you jump through some hoops. To legally go this route, you need to have an employer backing you up. Residence Permits can ONLY be obtained and renewed in China.

Main Disadvantages: More paperwork, more auxiliary steps (getting a Work Permit, getting a Health Check). You will pay Chinese tax, which can be surprisingly high if you're making an expat salary. You are tied to an employer, though if you change employers, the new one has a somewhat simplified process to get you on their books and a new RP--I've had to do this and it is pretty painless going from one legit employer to another.

Main Advantages: Any decent employer does the heavy lifting on paperwork and dealing with the bureaucracy instead of you. YOU ARE LEGAL FOR 12 MONTHS (in some cases, can be 24 months) AND CAN COME AND GO FROM CHINA AS YOU PLEASE. Also it may be my imagination, but officials and quasi-officials (PSB, police, banks, etc.) seem to be much more blase and give one the benefit of a doubt, when they pop open your passport and see the Residence Permit.

It's for times like these that I'm glad I don't have to sweat this visa circus.