I am aware that some international teaching candidates do sign contracts and then, for various reasons, fail to honor their agreements. As in your case, some have the integrity to contact the school early enough to allow for a qualified replacement to be found. This practice is far more preferable to just not showing up, which has been the case.
There are legitimate reasons not to honor a contract. An example of this would be if when you received the written contract you found that points previously agreed upon had been changed in an unacceptable manner. For example, the promised salary or health care has been substantially reduced. But, neglecting to honor a contract just because you have been offered a position that suddenly seems more appealing is an entirely different story.
Since you are new to international teaching you may have given little thought to the predicament you put a school in when you choose not to honor your contract. Imagine you are an administrator in China and have hired a history teacher currently living in America. Now, picture that with just a week until the start of school the teacher sends an email saying he has changed his mind and will not be coming. What will you do? How will you find another qualified teacher in a few short weeks? Especially one that is ready and willing to relocate to China on short notice. Chances are you will not. The bottom line is that as a teaching candidate you do have a moral and professional obligation to honor your word. In all fairness if you were not 100% serious about going overseas you should not have gone recruiting and accepted a contract. Fortunately, in your case the school does have plenty of time to find and hire a qualified replacement and it would be safe to say you have acted in a responsible manner.
I do understand your predicament and it may be that what you really want for the future is a career in your hometown. Since, however, you have accepted a position overseas and decided not to honor your contract we should take a look at what recourse the school may have and what consequences your may suffer due to your actions, or lack thereof.
For starters, you can be black balled at ISS, Search, and TIE and at a variety of smaller recruiting agencies. In effect, you’ll never get another offer to teach overseas, at least not by way of the major recruiting agencies. It may also be possible that the school has a representative in the United States that will sue you for the monetary losses incurred, such as advertising, time spent and expenses associated with finding and hiring your replacement. None this may happen but I would wager that any judge in small claims court would rule in favor of the school.
Obviously, I can’t tell you that you have to honor your contract over the contract being offered to you in the States. Just be aware of the consequences of your decision and be prepared to live with them. It has been my experience that our actions always seem to have a way of meeting up with us again in the near and distant future and sometimes in not so pleasant ways.