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Michael Standaert, an American ex-pat whose child goes to the school, tweeted on Monday that when his wife called to complain, the principal defended the show by saying pole dancing was an international phenomenon, and "good exercise."
In a text message to parents, Lai apologised for the "horrific viewing experience" and for not checking the dancer's performance, adding that the dance was intended to liven up the atmosphere.
Hours later, local education authorities announced they had fired the principal and put Xinshahui under investigation.
"Other schools in the district should reflect on this incident and strictly uphold education standards," the Bao'an education bureau said in a statement.
"I may as well be dead. I already lost the hope to live," Lai told state-run tabloid the Global Times.
This was just one of several incidents in a shaky start to the Chinese school year.
Over the weekend, parents complained that a television programme deemed mandatory viewing by state educators on Saturday night included 12 minutes of advertisements, mostly promoting online tutoring courses and stationery sales.
Earlier the same day, police arrested 46 people in central Hunan province after hundreds gathered to express dissatisfaction with the local school system.
According to posts on social media, parents were incensed when they were told they would have to move their children into dormitories at a local private school, dramatically increasing tuition fees.