Will China improve teaching quality? Yes, but it must be done on the cheap. Will they hire PhD's? They would be happy to hire an army of PhD's if they can hire them at 4500Rmb/month. (About US$650.)
Setting aside the expense of quality, how about the system of quality? Academia is one of the hardest things to change in any country. Academics are not accountable to things like the sink or swim forces of market economics. A bad school can go on teaching for years at an educational deficit to thousands of students without anyone realizing it. Look at America. The majority of public school teachers in California send their children to private schools.
Looking at a place like Japan, which does know the value of quality, we get little encouragement. Korea spends more on English teaching than Japan. Chain schools hiring foreign teachers with little or no experience at relatively low rates are all over the country. This sort of low skill labor is going to always be with us and if business has anything to do with it then it will, for the most part, zlways have a McJob aspect to teaching English abroad.
 "Slim Pickings From Trillions Spent on English Education - The amount of money spent on Koreans’ unending quest to master English was W15 trillion (US$1=W942) last year, three times more than the W5 trillion spent by Japan even though the population there is 2.6 times greater than Korea’s. The Samsung Economic Research Institute in a report titled "The Economics of English" on Wednesday estimated Korea’s English-related investment last year at around W14.3 trillion for private lessons and W700 billion for assessment." More: http://english.chosun.com/w21data/html/news/200611/200611160023.html
 "...brilliant teachers with years of experience and stacks of certificates probably won't receive any recognition other than a small monthly bonus in their payslip. The system is designed for entry-level labor, and Nova expects no special skills or talents. (Fair enough; most applicants have none to offer anyway.) Though students may occasionally present a challenge - I've been asked doozies like, "What's the difference between simple future tense and future perfect tense?" and "How do I choose between see, look at, or watch?" - overall the job requires very few brain waves." More: http://vocaro.com/trevor/japan/nova/level_up.html
 "McJob is slang for a low-pay, low-prestige job that requires few skills and offers very little chance of intracompany advancement. Such jobs are also known as contingent work. The term McJob comes from the name of the fast-food restaurant McDonald's, but is used to describe any low-status job, regardless of who the employer is, where little training is required, and where workers' activities are tightly regulated by managers. Most perceived McJobs are in the service industry, particularly fast food, copy shops, and retail sales. Working at a low paying job, especially one at a fast food restaurant, is also often referred to as flipping burgers." More: http://www.answers.com/topic/mcjob