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Malmö really took off in the 14th century with the arrival of the Hanseatic traders, when grand merchants' houses were built, followed by churches and a castle. The greatest medieval expansion occurred under Jörgen Kock, who became the city's mayor in 1524. The town square, Stortorget, was laid out at that time, and many of the best 16th-century buildings are still standing. After the city capitulated to the Swedes in 1658, Malmö rose in importance as a commercial centre and its castle was strengthened to protect trade.

Nowadays, the 20th century's heavy industries (car and aircraft manufacture, and shipbuilding) have been replaced by smaller companies, particularly in the service, financial and IT sectors. There's also been an upsurge in the number of students living in Malmö (currently around 18, 000) with the opening of a new university campus here in the late 1990s.