In Liaoning, ‘Shantytown’ is the name for the city areas where dilapidated buildings are clustered together. The dwellings in these areas are mainly earth-rock or brick-wood buildings built in the early period after the People’s Republic of China (PRC) was founded. Some of them were even built during the Japanese occupation and Manchukuo period as servants’ quarters or simple houses. Most of these buildings are more than 50 years old, and almost all of them are dilapidated. The reconstruction of the shantytowns was once a historical problem for Party committees and government at all levels in Liaoning. The Party committee and government of Liaoning Province started to reconstruct the shantytowns early in 2005, although they encountered difficulties at every stage of reconstruction – from financing to building demolition, from construction to distribution, from moving in to habitable living conditions. Because effective management and proper measures were adopted, we have accomplished the phased objectives of the ‘Shantytown Reconstruction’. In 2005 alone, the eleven cities in the provincial plan of shantytown reconstruction demolished 7,650,000 square metres of shanty buildings, started to construct 7,580,000 square metres of buildings for returnees, completed 3,340,000 square metres and allocated 104,002 shantytown residents in total. The residential conditions and environment of the shantytown residents were greatly improved.