I have never been able to find anything definitive about age limits but I have seen much discussion, ranging from people refused visas at 59 because they'd turn 60 during the contract to others reporting that they were still employed at 75 or so. It appears to vary from place to place and perhaps depend on a school's guanxi. This is China!
I'll summarise my own experience here, partly to vent and partly because it might turn out useful.
My birthday is in December, so if I start at a school aged A then I finish the contract aged A+1.
2007, age 59: Job in Nanjing, no problem.
2008, age 60: school in Fujian make me a good offer, but inform me at the last minute that they cannot get me a visa. They say they can get the authorities to give visas for returning teachers, but not for a new hire over 60.
2008. age 60: a different school in the same prefecture, where I've worked before, hire me. They say it is no problem, and anyway the limit is 65.
2010, age 62: I get a job in Shanghai at a well-known uni; visa is not a problem.
2011, age 63: renewed, no problem
2012, age 64: Problem! I have signed a one-year contract, sept 1 to august 31, but the FEC and residence permit visa only go to my birthday in December. First the FAO tells me they can get it extended if I have health insurance and a letter from my family, presumably saying they won't sue if I keel over or get hit by a truck. Later he informs me no extension will be possible.