I’ve never had a full deposit back in cash in China, but you can use it to pay off any outstanding bills etc. So the best thing is to leave the last few months of Management fee (物管费） and any utilities which you can get away without paying (without being cut off) until the very end. Then you can just tell the landlord to use the deposit to pay for these things.
I had one apartment where the outstanding Management fee was actually larger than the deposit, so I just paid the extra and all was good.
Interesting that they would charge a higher deposit for foreigners. I’d like to know what kind of terrible habits this landlord thinks laowais have that command an extra deposit!