I just went through this. I survived 12b years in Zhejiang despite the 5 Year Rule. It was a provincial rule and my university was above the provincial level so they could trump that rule.
Now I'm in Beijing and have worked at three unis here. The first one sucked so I left after year. The next one was good, but cancelled my contract when I had a stroke in Sept. 2014. My current uni gave me a chance to stay on. Despite the stroke, I can still teach and amn't ready to retire and return home as the previous uni hoped I would when they cancelled me.
Nonetheless, as I was approaching 60 when I decided to move to Beijing in 2012, I had asked all three universities about their policies. The university in Zhejiang had the same policy. We won't hire anyone over 60 but if we hire you before that, you can stay till you're 65. That's also what my current uni told me when I joined them in Jan.,2015 a year shy of 60.
They had already asked me to renew in Jan. of this year, and I agreed. though the pay is low, not many schools are willing to give a gimp a chance.
A few weeks later, when my department submitted the contract and paperwork to renew me, They got a call from the FAO who told them that Beijing FEB had issued new rules and would not approve an FEC for any FT over 60. I had already won the Excellent Teacher Award from the FAO (prize: a 2GB HD and a nice red certificate), so I knew this wasn't a school issue. The dean, the Director and the head of the English department went to the FAO and said, make this happen. We want him back. Those three, and I, wrote letters to the Beijing FEB that the FAO submitted to them-their's in Chinese, mine in English.
Within 4 days the Beijing FEB contacted our school's FAO and said, Go ahead and submit the renewal request. Two weeks later I got another year on my FEC and two weeks after that, a fresh RP.
@cruisemonkey, this may be what your school is having to anticipate going forward. Sounds like they want you back but realise the hoops they may have to jump thru to do it so want to make sure of your intensions before they (or you) jump.
If you like the place let them work through the process. Again it sounds like they want you back. Don't have a hissy-fit over Chinese procedures. It is what it is.