The central territory of the Shang realm lay in north-western Honan, alongside the Shansi mountains and extending into the plains.  It was a peasant civilization with towns.  One of these towns has been excavated.  It adjoined the site of the present town of Anyang, in the province of Honan.  The town, the Shang capital from c. 1300 to 1028 B.C., was probably surrounded by a mud wall, as were the settlements of the Lung-shan people.  In the centre was what evidently was the ruler’s palace.  Round this were houses probably inhabited by artisans; for the artisans formed a sort of intermediate class, as dependents of the ruling class.  From inscriptions we know that the Shang had, in addition to their capital, at least two other large cities and many smaller town-like settlements and villages.  The rectangular houses were built in a style still found in Chinese houses, except that their front did not always face south as is now the general rule.  The Shang buried their kings in large, subterranean, cross-shaped tombs outside the city, and many implements, animals and human sacrifices were buried together with them.  The custom of large burial mounds, which later became typical of the Chou dynasty, did not yet exist.

The Shang had sculptures in stone, an art which later more or less completely disappeared and which was resuscitated only in post-Christian times under the influence of Indian Buddhism.  Yet, Shang culture cannot well be called a “megalithic” culture.  Bronze implements and especially bronze vessels were cast in the town.  We even know the trade marks of some famous bronze founders.  The bronze weapons are still similar to those from Siberia, and are often ornamented in the so-called “animal style”, which was used among all the nomad peoples between the Ordos region and Siberia until the beginning of the Christian era.  On the other hand, the famous bronze vessels are more of southern type, and reveal an advanced technique that has scarcely been excelled since.  There can be no doubt that the bronze vessels were used for religious service and not for everyday life.  For everyday use there were earthenware vessels.  Even in the middle of the first millennium B.C., bronze was exceedingly dear, as we know from the records of prices.  China has always suffered from scarcity of metal.  For that reason metal was accumulated as capital, entailing a further rise in prices; when prices had reached a sufficient height, the stocks were thrown on the market and prices fell again.  Later, when there was a metal coinage, this cycle of inflation and deflation became still clearer.  The metal coinage was of its full nominal value, so that it was possible to coin money by melting down bronze implements.  As the money in circulation was increased in this way, the value of the currency fell.  Then it paid to turn coin into metal implements.  This once more reduced the money in circulation and increased the value of the remaining coinage.