To understand the socio-spatial impacts of property-led redevelopment on China's urban neighbourhoods, this study inquires into two influential redevelopment projects in Shanghai. The significance of this research lies in using first-hand data to indicate the new trends of urban change in the Chinese city. Through analysing the data from a 500-questionnaire survey, two different forms of socio-spatial changes under property-led redevelopment are identified. On the one hand, an extensive residential displacement occurs during redevelopment, a process of gentrification is emerging in China. On the other hand, to re-image the inner city and promote economic growth, urban redevelopment has led to changing urban function/land use in old neighbourhoods. As the local government legitimizes property-interest-centred reinvestment in the inner city, old neighbourhoods, which used to accommodate low-income residents, are now occupied by people with higher socioeconomic status or transferred to high-valued-added commercial land use. The exchange value of urban space is produced at the cost of old urban neighbourhoods' everyday use value. (c) 2007 Elsevier Ltd. All rights reserved.