What is now China was inhabited by Homo erectus more than a million years ago. Recent study shows that the stone tools found at Xiaochangliang site are magnetostratigraphically dated to 1.36 million years ago. The archaeological site of Xihoudu in Shanxi Province is the earliest recorded use of fire by Homo erectus, which is dated 1.27 million years ago. The excavations at Yuanmou and later Lantian show early habitation. Perhaps the most famous specimen of Homo erectus found in China is the so-called Peking Man discovered in 1923-27.
Three pottery pieces were unearthed at Liyuzui Cave in Liuzhou, Guangxi Province dated 16,500 and 19,000 BC.
The Neolithic age in China can be traced back to between 12,000 and 10,000 BC. Early evidence for proto-Chinese millet agriculture is radiocarbon-dated to about 7000 BC. The Peiligang culture of Xinzheng County, Henan was excavated in 1977. With agriculture came increased population, the ability to store and redistribute crops, and the potential to support specialist craftsmen and administrators. In late Neolithic times, the Yellow River valley began to establish itself as a cultural center, where the first villages were founded; the most archaeologically significant of those was found at Banpo, Xi’an. The Yellow River was so named because of loess forming its banks gave a yellowish tint to the water.
By 7000 BC, the Chinese were farming millet, giving rise to the Jiahu culture. At Damaidi in Ningxia, 3,172 cliff carvings dating to 6000-5000 BC have been discovered “featuring 8,453 individual characters such as the sun, moon, stars, gods and scenes of hunting or grazing.” These pictographs are reputed to be similar to the earliest characters confirmed to be written Chinese. Later Yangshao culture was superseded by the Longshan culture around 2500 BC. Adapted from: http://en.wikipedia.org/wiki/History_of_China