There is a large body of literature on urban village in Chinese cities.  You appear to be trying to connect urban spatial structure to urban village.  First, in terms of the location of urban village, there are two types: those located on urban fringe and those located inside the city.  You can try (both theoretically and empirically) to find some connection with urban spatial structure, which is also related to the size of the city.  Second, an interesting question might be about the relationship between land use type and the location of urban village.  In other words, do urban villages appear more often surrounded by residential use than by industrial use?  This might be an interesting approach.

Article Uneven Land Reform and Urban Sprawl in China: The Case of Beijing