In connection with the growth of business, the cities kept on growing.  It is estimated that at the beginning of the third century, the city of Lin-chin, near the present Chi-nan in Shantung, had a population of 210,000 persons.  Each of its walls had a length of 4,000 metres; thus, it was even somewhat larger than the famous city of Loyang, capital of China during the Later Han dynasty, in the second century A.D.  Several other cities of this period have been recently excavated and must have had populations far above 10,000 persons.  There were two types of cities:  the rectangular, planned city of the Chou conquerors, a seat of administration; and the irregularly shaped city which grew out of a market place and became only later an administrative centre.  We do not know much about the organization and administration of these cities, but they seem to have had considerable independence because some of them issued their own city coins.

When these cities grew, the food produced in the neighbourhood of the towns no longer sufficed for their inhabitants.  This led to the building of roads, which also facilitated the transport of supplies for great armies.  These roads mainly radiated from the centre of consumption into the surrounding country, and they were less in use for communication between one administrative centre and another.  For long journeys the rivers were of more importance, since transport by wagon was always expensive owing to the shortage of draught animals.  Thus we see in this period the first important construction of canals and a development of communications.  With the canal construction was connected the construction of irrigation and drainage systems, which further promoted agricultural production.  The cities were places in which often great luxury developed; music, dance, and other refinements were cultivated; but the cities also seem to have harboured considerable industries.  Expensive and technically superior silks were woven; painters decorated the walls of temples and palaces; blacksmiths and bronze-smiths produced beautiful vessels and implements.  It seems certain that the art of casting iron and the beginnings of the production of steel were already known at this time.  The life of the commoners in these cities was regulated by laws; the first codes are mentioned in 536 B.C.  By the end of the fourth century B.C. a large body of criminal law existed, supposedly collected by Li K’uei, which became the foundation of all later Chinese law.  It seems that in this period the states of China moved quickly towards a money economy, and an observer to whom the later Chinese history was not known could have predicted the eventual development of a capitalistic society out of the apparent tendencies.