I don’t think attendance matters, only grades. You have to keep a certain average to maintain the scholarship. I’m not 100% certain about this, but to my knowledge, there was no centralized attendance tallying function at the university where I did my MA in Taiwan, so there would have been no way to report such things to the MOE or anyone else. (Not that we dared skip many classes…er, um, well, apart from “History of Translation”, maybe. But since they never seemed to find out about it and cut my scholarship, more evidence that attendance probably doesn’t count once you’re in an MA program.)
I knew two foreigners who refused to attend a single session of a class taught by a professor they considered to be incompetent to teach the subject. The only consequence was that they were forced to write a letter of apology at the end of the semester. I don’t think they were even failed for the course. I’m not sure if they were on scholarship, but I think at least one of them would have been.