Neolithic Settlements and Incipient Urbanism (c. 5000–770 BC)

As in other parts of the world, early Chinese towns evolved from villages. During the Middle Neolithic era (c. 6500–5000 BC), large sedentary villages with a few hundred people based mainly on agriculture and animal domestication had emerged. Widely distributed in China, many of the villages were surrounded by circular ditches and walls constructed with the hangtu (tamped earth) technique, whereby layers of earth are pounded down firmly within wooden frames, a technique that continued to be used in all subsequent periods in China's city wall construction. City walls were the most enduring morphological feature of the Chinese city, serving as a spatial marker demarcating a privileged space for the security of the urban population.

China's first walled towns, some with moats, emerged during the Longshan period (3000–2000 BC) in the Central Plain in modern Henan Province. Other town sites were found in the mid Yangzi River valley, Shandong peninsula, and Inner Mongolia. Incipient urbanism appeared during the Longshan era. These walled settlements, most of them squarish or roughly rectangular in shape, while others roughly circular and oval, have been labeled chengbao (literally, walled fortresses) by Chinese archaeologists, a term that suggests that their main function was defense. Archaeological finds in these towns suggest that they were not yet cities, because territorial state and written language had not appeared. However, raised ceremonial platforms, cemeteries, and a large number of clay figurines of animals and humans, jade objects, and copper smelting slag were found, which suggest that the walled towns were religious and production centers with highly stratified societies.

The Longshan period overlaps in part with what Chinese archaeologists believe to be China's first dynasty and territorial state, the Xia (c. 2200–1750 BC), during which China's earliest city, Erlitou (1900–1500 BC), which is located near today's Yanshi City, Henan Province, emerged. Occupying an area of 300 ha, the Erlitou site was most likely a capital of the Xia dynasty and possibly an early capital of the succeeding Shang dynasty (1600–1046 BC) as well. The Erlitou culture represented a highly significant phase at the very beginning of Chinese civilization. At the Erlitou site, there are clear signs of state formation, urban planning, and the existence of complex societies with clear social stratification and production specialization. Whereas it is not clear which ancient capital mentioned in ancient Chinese documents corresponds with the Erlitou site, scholars believe Erlitou was a capital city with a large temple/palace complex as well as a large production center where bronze, bone, and ceramic objects were produced, many of them used for ritual and ceremonial purposes. The production of bronze weapons and ritual vessels was of particular importance as ceremonial bronze vessels symbolized religious and political power. As such, the Erlitou site was clearly an early political, military, and religious center.

Abundant archaeological evidence has been found at three sites, all in modern Henan Province, that were unquestionably the largest urban centers of the Shang dynasty: (1) a site at Yanshi named by archaeologists as Yanshi Shang City (Yanshi shangcheng), (2) a site named Zhengzhou Shang City (Zhengzhou shangcheng) in the modern city of Zhengzhou, and (3) a large site at Xiaotun in modern Anyang long known as the Yinxu, which literally means 'the remaining sites of the Shang'. These three cities were unquestionably the major cities of the early, middle, and late Shang period, respectively. Scholars agree that Zhengzhou Shang City and Yinxu served as capital cities of the middle and late Shang, but it is less clear if Erlitou and Yanshi Shang City were also, respectively, capital cities of the late Xia and early Shang. It should be noted that no city walls have been found at Erlitou and Yinxu, which begs the question as to whether the presence of city walls should be considered as a necessary condition for defining early cities in China.

Archaeological data of the four earliest cities mentioned above suggest that early Chinese urbanism differs significantly from the key characteristics of the cities in ancient Mesopotamia, Egypt, and India. Aside from the fact that the population of these cities was unquestionably larger than the nearby villages and that there was a clear division of labor in specialist handicraft production, archaeological assemblies at the four ancient Chinese cities do not display the other major characteristics of the ancient cities of the Old World as identified by the eminent British archaeologist V. Gordon Childe in his highly influential 1950 paper, where written language, long distance trade, monumental public buildings, and surplus accumulation were also listed as key features of the earliest cities. China was not even mentioned in this study. Early Chinese urbanism was based on the role of the cities as political, religious, and defense centers.