Intensivation and modernization of agriculture led to strong population increases especially in the Yangtze valley from Sung time on.  Thus, in this area commerce and industry also developed most quickly.  Urbanization was greatest here.  Nanking, the new Ming capital, grew tremendously because of the presence of the court and administration, and even when later the capital was moved, Nanking continued to remain the cultural capital of China.  The urban population needed textiles and food.  From Ming time on, fashions changed quickly as soon as government regulations which determined colour and material of the dress of each social class were relaxed or as soon as they could be circumvented by bribery or ingenious devices.  Now, only factories could produce the amounts which the consumers wanted.  We hear of many men who started out with one loom and later ended up with over forty looms, employing many weavers.  Shanghai began to emerge as a centre of cotton cloth production.  A system of middle-men developed who bought raw cotton and raw silk from the producers and sold it to factories.

Consumption in the Yangtze cities raised the value of the land around the cities.  The small farmers who were squeezed out, migrated to the south.  Absentee landlords in cities relied partly on migratory, seasonal labour supplied by small farmers from Chekiang who came to the Yangtze area after they had finished their own harvest.  More and more, vegetables and mulberries or cotton were planted in the vicinity of the cities.  As rice prices went up quickly a large organization of rice merchants grew up.  They ran large ships up to Hankow where they bought rice which was brought down from Hunan in river boats by smaller merchants.  The small merchants again made contracts with the local gentry who bought as much rice from the producers as they could and sold it to these grain merchants.  Thus, local grain prices went up and we hear of cases where the local population attacked the grain boats in order to prevent the depletion of local markets.

Next to these grain merchants, the above-mentioned salt merchants have to be mentioned again.  Their centre soon became the city of Hsin-an, a city on the border of Chekiang and Anhuei, or in more general terms, the cities in the district of Hui-chou.  When the grain transportation to the frontiers came to an end in early Ming time, the Hsin-an merchants specialized first in silver trade.  Later in Ming time, they spread their activities all over China and often monopolized the salt, silver, rice, cotton, silk or tea businesses.  In the sixteenth century they had well-established contacts with smugglers on the Fukien coast and brought foreign goods into the interior.  Their home was also close to the main centres of porcelain production in Kiangsi which was exported to overseas and to the urban centres.  The demand for porcelain had increased so much that state factories could not fulfil it.  The state factories seem often to have suffered from a lack of labour:  indented artisans were imported from other provinces and later sent back on state expenses or were taken away from other state industries.  Thus, private porcelain factories began to develop, and in connection with quickly changing fashions a great diversification of porcelain occurred.