First time I came across the Hakka houses was reading Sottsass writings
Here more about Hakka houses:
http://www.asiawind.com/hakka/houses.htm

This year URBANUS, one of the leading chinese firms won several prizes with this project
read more about it on archdaily

What is really interesting about them?
-with  a first glance I think western pople might find them dark, too closed, unpleasant…
to get an idea read the comments in the archdaily post:

“you gotta be kidding me. I thought you are living in 21 century!? Don’t people now have enough sense of what fundamental and social rights are?! Let them live like a human being!!”

some suggest this link:http://www.answers.com/topic/panopticon

Inhumane and a prime example of the ghettoization of a class of people. I thought we were pass this by now? that is all.

There are two issues that should be considered before commenting: the different idea and perception of privacy in chinese culture. In many situations during daily life several actions are shared in a public/semi public space. Actions that would belong to the private sphere in other countries.
To give an example:
-you may see easily woman washing their hair with a bucket on the side walk.
-a man walking in pyjama going to the public toilet
-public toilet without partition between the different wc
-train vagon with sleepers without partitions

Second issue regards density. Chinese cities are dense. And big. And vast.  

If you still are not sure take a look at this video (thanks christian for the link!)
http://www.guardian.co.uk/world/video/2009/jan/23/shanghai-longchang-apartments