In China, urban housing is the most significant part of housing sector. In recent years, the large-scale housing developments and gated housing community blocks have become key urban landscapes and housing provisions in major medium scale and large scale cities in China. The design and master-planning of such housing developments are not necessarily sustainable. Therefore, this study evaluates key issues and potentials of urban housing blocks (or small residential districts) in China and proposes for their improvement through optimised design and planning. This study is based on design improvement of urban housing blocks in the City of Ningbo, China. This study is undertaken as part of a research-informed teaching exercise, assessing several urban housing blocks and improving their design through evaluation of four key aspects of: a) environmental performance; b) green infrastructure; c) urban form and layout; and d) building orientation. In this study, the author will elaborate, in particular, on the importance of urban pattern and layout. The study will conclude on methods and implementation strategies for urban housing design improvement and optimisation in the context of China. This research study is part of an on-going EPSRC-DfID funded research programme, under the ‘Energy and International Development’ scheme. The project is titled ‘Energy and Low-Income Housing in Tropical Housing’ and has a huge scope of housing and community analysis in both rural and urban areas of China, Thailand, Tanzania and Uganda. The focus of this research paper is on China’s urban housing.