It turns out, there have been many instances of cities in the sky, or fata morgana as they have been named. I only knew on one in China a few years back, but seems there have been others. Charles Fort collected a number of tales as below and detailed in his book New Lands.
In October of 1796 a mirage of a walled town had been seen distinctly for half an hour at Yougal in Ireland. Again upon March 9th 1797 in Yougal had been seen a mirage of a walled town.
In June of 1801 a mirage of an unknown city, It was seen for more than an hour. A representation of mansions surrounded by shrubbery, with forests behind.
October 10th 1881 that at Rugenwalde, Pomerania now Poland and Germany the mirage of a village had been seen in the sky, Snow covered roofs from which hung icicles.
On June 29th 1882 over lake Orsa in Sweden, representations of steam ships had been seen in the sky, and an island covered with vegetation.
March 12th 1890 at 4pm in the sky of Ashland, Ohio was seen a representation of a large unknown city.
Early in June 1897 in the Yukon in Alaska, A city had been seen in the sky, The description of this city is that it looked like some immense city from the ancient past.
On Feb 17th 1901 it is said Indians of Alaska had told of the occasional appearance of city, appearing suspended in the sky, description by visitors to this area, we could see plainly houses, well defined streets, here and there rose tall spires over huge buildings, which appeared to be ancient mosques and cathedrals. More like an ancient European city.
August 2nd 1908 at Ballyconneely on the coast of Ireland, was seen a phantom city, of different sized houses, in different styles of architecture, visible for over 3 hours.
And in 2015 there was a sighting and video footage in China of one.
Hard to know for sure what is going on up there, but interesting none-the-less.