China seems to have an urban population of about 690 million. So much more than Japan. But this doesn't tell us much, as you can live in a city but not necessarily enjoy high standard of living.
The real interesting question is: how many people in China have the same standard of living as the average person in Japan. So Japan has a HDI of 0.912. Based on this list the only regions of China with a comparable HDI are Hong Kong (0.944), Macau (0.944), Shanghai (0.908) and Beijing (0.891). The populations of these cities combined is about 51 million. So, about 40% the population of Japan. Excluding Hong Kong and Macau doesn't change it much: get's it down to about 43 million, about 30% of Japan. But easily comparable to the population European nations. So yes, China definitely has a developed nation 'embedded' in it.
There's a lot of background mess in our mental pictures of the world. We try and be accurate on important issues, but a whole lot of the less important stuff we pick up from the media, the movies, and random impressions. And once these impressions are in our mental pictures, they just don't go away - until we find a fact that causes us to say "huh", and reassess.
Here are three facts that have caused that "huh" in me, recently, and completely rearranged minor parts of my mental map. I'm sharing them here, because that experience is a valuable one.