It is on the Fuchun River at the head of Hangzhou Bay and handles river traffic through its port. It is also a rail hub with important links to Shanghai. Long a famous silk-producing center, Hangzhou has recently been developed into a major industrial complex. Manufactures include silk and cotton textiles, iron and steel products, motor vehicles, pharmaceuticals, cement, rubber, paper and bamboo products, chemicals, machine tools, electronic equipment, and processed tea.
Many Chinese officials have vacation homes on the lake.
Hangzhou was founded A.D. 606 and was from 907 to 960 the capital of a powerful kingdom. Many of the city's picturesque monasteries and shrines date from this period. It was the capital of the Southern Sung dynasty from 1132 to 1276, when it was sacked by Kublai Khan. In the Southern Sung period Hangzhou, rich with a thriving silk trade, was a center of art, literature, and scholarship and a cosmopolitan city with a large colony of foreign merchants-Arabs, Persians, and Nestorian Christians. Marco Polo, who visited it then, described it as the finest and noblest city in the world.