To elaborate further: The City and The City is set in a city that shares the same geographic location as another. The two cities are the dilapidated and declining city of Besz, an Eastern European analogue, and the tech-boom City of Ul-Quoma, which is harder to pin down but has elements of Turkey and Baathist Syria and Egypt. The two cities overlap slightly, some buildings are in both cities but individual apartments are in one or the other, streets can be shared or in either, but citizens of one city are not allowed to interact or look at anyone or anything in the other lest they "breach" the taboo and are punished by a shadowy organization that maintains the rigid border (physical and mental) that separates the two.

Its a fantastic setting, but its one that is played in a fairly realistic way. There is no magic behind the separation, you never know why it happened, none of that kind of hacky justification about how and why any of this works. What you do know is how it effects the people in these cities, how they have to dance around every day life subconsciously unseeing elements of one city intruding into another, how the obvious ridiculousness of it all inspires underground political movements and contraband literature, how the city becomes an international oddity and fodder for academia in the way real life rogue nations do today. It is a very grounded and honest approach at the setting instead of something that wallows in its oddity for its own sake. In my mind when I was reading this I had a phantom image of this book that took every wrong step prose-wise, a book that got too into the clever in its faux-Borgesian thought experiment or maniacal in the process of remedying it with reality. Luckily China is a great author who avoids these pratfalls and uses the exoskeleton of the typical Neo-noir plot (a dead nameless girl in a courtyard sparks an investigation into a wide-ranging conspiracy doggedly followed by a cynical detective) and the strangeness of the setting into something that is more than the sum of its parts.