If you want to see what life was like in China hundreds of years ago, one of your best options is Pingyao (平遥), in Shanxi province. The village is surrounded by an ancient wall, now located in the center of the modern city of Pingyao. Cars are not allowed in large portions of the ancient village, so you can roam freely, without worrying about getting run over. And while the main street is quite touristy, you only have to walk a few blocks to see life as it was before modern times.
The area around Shanghai and Suzhou, China is famous for its water towns. There are at least eight different villages within a few hours of the cities, each with its own special character. These villages are perhaps the best way to get a glimpse of the old way of life in central China.