The history of Hangzhou is inextricably linked with that of Zhejiang Province. It was established as a major commercial city in China from the establishment of the southern end of the Grand Canal there during the Sui Dynasty (581-618). Hangzhou's most important periods in Chinese political history came when it served as the capital of the Wuyue State (893-978) and again when it was the capital of the Southern Song Dynasty (1127-1279). At the time of the Southern Song, it was one of the largest and finest cities in the world, with over one million inhabitants. Marco Polo claimed to have visited Hangzhou at this time, calling it Kinsai or Quinsay. The Chinese name for the city at this time was Lin'an.

Even after the Mongol emperors conquered the Southern Song and made Beijing their capital in 1279 AD, Hangzhou remained a commercial and trading center, but slowly declined as a port when its harbour gradually silted up and trade moved to Ningpo and later to Shanghai. Disaster came in 1861-63 when Hangzhou was occupied by the Taiping rebels then recaptured by the Imperial army. In the aftermath the city was entirely destroyed and its population was killed or displaced.

Since the construction of railways and highways in the 20^th century, Hangzhou has increased in economic importance again. Its major industries are silk and cotton textiles, chemicals, farm machinery and machine tools.

Recently a national-level nature reserve has been created near Hangzhou, at West Tianmu Mountain. Because of the diversity of plant species it has been called a "natural botanical garden". Here you can find the gingko tree, a living fossil that has survived in China since the time of the dinosaurs. Animal species found in the nature reserve include the cloud leopard and the black muntjac.