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The opening chapters of the last volume are dedicated to the history of the warring states of the Chankuo period ("The Warring States", the 5th-3rd centuries B.C.). We provide a brief description of events in each of them, including the domain of the Son of Heaven (t'ien-tzu), i.e., the wang of Chou. A detailed account is given of wars and politico-diplomatic actions which accompanied that protracted and vehement strife between kingdoms and coalitions formed by them. The profound transformation of internal structure that changed the entire aspect of the Chou China is also discussed. Special attention is given to the process of defeudalization that had already begun in the late phases of Ch'unch'iu period.

The end of Ch'unch'iu period was marked by a number of important innovations. China saw the beginning of Iron Age. Cheaply produced iron tools were used for converting virgin lands into plowed fields. This contributed to the growth of farming population and its well-being. This was also the time of the rapid progress of cities with their crafts, trades, commerce and monetary relations. Coins of different kinds found by archaeologists and dated to the late Ch'unch'iu provide proof of that. Private property, well-developed market relations, affluent commoners — something previously unheard-of — appeared in cities. Agrarian countryside also started to be involved into market relations. Farmers were selling their extra production. All those changes and innovations in economy were accompanied by major shifts in the sphere of social relations.

Top-level aristocratic elite began losing its exceptional role, though it still retained its position in the upper echelons of social hierarchy. A new social stratum, shih, emerged — later, it would become extremely important for further development of Chinese society. It might be thought of as the Chinese "middle class", which originally incorporated members of nobility, primarily the tafu warriors. Not many of warriors' sons belonging to this class could inherit father's war chariot with a team of four horses. None of the states possessed a sufficient number of chariots. As is known, it was by this criterion that the main distinction between them was drawn: small kingdoms had 100 to 200 chariots, medium kingdoms had 400 to 800 chariots, and the larger ones, up to several thousand. In a word, during the late Ch'unch'iu, the shih — that lowest stratum of the ruling classes — became the most numerous one. The influx that swelled the ranks of the shih was coming both "from above" (sons of the tafu and of higher ranking aristocrats) and "from below" (warriors with a distinguished career). Besides, literate men and experts in ritual were also admitted into the ranks of the shih, since the behest to promote the intelligent and the capable was strictly followed in China.

For the most part, the volume is an account of the activity of Confucius (who was already partly discussed in Volume II) and other outstanding thinkers and reformers of the Chankuo period. This volume's main emphasis lies on the Master's activity as a reformer: he aimed at changing the fundamental principles of Chinese life by gradually creating a new basis of strict socio-ethical norms. Confucius fervently wished to leave behind all those evils which were so typical of the feuds waged by the ruling elite. To the reality of the past he opposed the ancient norm that he idealized and that had existed — more in words than in deeds — parallel to the world of intrigues and murders. He strove to restore the best traditions and to teach all the people to observe the ceremonies and norms of life that he unhallowed and transformed into a universally mandatory ethical standard.

Having adapted the masterfully reinterpreted tradition to serve his ends, Confucius turned out to be a great reformer. He put forward the idea of Tao as the great way of the truth and endless perfection, and he sang the "man of noble birth" (chun-tzu) as a paragon of following Tao. The primary meaning of the Master's ideas — which were revolutionary in their inmost essence — was the elimination of the social border dividing people of different descent; he wanted that border to be placed differently, viz. between the people and the rulers. The latter should be the most intelligent and capable men, like Confucius' disciples and their equals, not some opportunists who seized power by chance. As for the system of government, it must rest on those principles that he fostered: to care for the people, to understand their needs, to be able to win their trust and to lead them, and — perhaps, the most important of all — to seek no personal gain. Of course, all people loathe poverty and yearn for prosperity. However, a wise ruler must modify their wishes, moderate their ardor, and endeavor to achieve such a state of affairs when people would become accustomed to be content with what they have already, while constantly trying, by all legal means, to increase their wealth.

An admirer of things ancient, the Master was also a radical innovator. Though, to tell the truth, his compatriots failed to appreciate, let alone comprehend, this at one go. Rulers of the states who struggled for power and mostly used military strength had fully justified fears that, if they made people's welfare their priority, it would seriously handicap them. In the Chankuo period, wars occurred as often as before. However, their nature radically changed. The feudal battles of the chariot-mounted tafu "chivalry", with armor-clad infantry as auxiliary troops, were now a thing of the past. They were replaced by battles in which participated several dozen to several hundred thousand armor-clad infantrymen — armies that rulers found very expensive to sustain. This lead to imposing heavier taxes. Confucians, of all groups, opposed the increasing taxation of the people most ardently, be it the humble but steadfastly uncompromising Confucius or the unceremonious Meng-tzu (one of the most brilliant followers of the Master's cause) who shouted at rulers granting him audience.