Urban regeneration has become a central focus in global urban studies, increasingly linked to the dual imperatives of sustainability and urban resilience. Chinese urban villages (Chengzhongcun) and Spanish Suelo Urbano no Consolidado (SUNC, Unconsolidated Urban Land) areas represent two contrasting forms of urban socio-spatial systems engulfed by urban expansion—both characterized by dense, historically rooted morphologies and incomplete infrastructure. While Chinese urban villages retain collective land ownership and self-built structures, SUNC areas preserve working-class housing typologies and community social structures within a sophisticated legal framework. As China shifts from a demolition–reconstruction model toward more sustainable regeneration approaches, this study compares Beijing's Cuigezhuang with Málaga's El Perchel through spatial analysis and stakeholder surveys. The research evaluates how differing planning systems foster or constrain sustainable development alongside social, spatial, and institutional resilience in regeneration processes. Findings demonstrate that Spain's incremental, participatory approach—anchored in Planes Especiales de Reforma Interior (PERI, Special Plans for Inner Urban Renewal) and land readjustment (equidistribution) mechanisms—significantly outperforms China's state-led demolition-based model in supporting long-term sustainability, heritage integrity, community cohesion, and spatial continuity. Spain's legally embedded participation and in situ rehabilitation strategies offer transferable lessons for China's evolving sustainable and resilience-oriented regeneration paradigm.