IMHO, many of China's problems with developing economics and industry compared to the West had a lot to do with the class structure of Ancient China. Even as late as the Qing, the emperor and his bureaucrats dominated the system but most importantly artisans and merchants were seen as beneath even the peasantry. Very little attention and resources were given to these artisans to build or invent things or merchants to start new businesses. Confucian morals and Bureaucratic policies were seen as the utmost importance.
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Really. During Song mercantile and manufacturing account for a large portion of state revenue. You are telling me that at that time merchants are seen as beneath peasantry? The fact is each dynasty is different, so you cannot really generalize that way. Mongolian Yuan favors merchants, while look down on peasants. Ming is opposite, perhaps due to backlash. Even on the top, there are change of political influence of nobility, bureaucrats, and emperor -- during reign of weak emperor, bureaucrats may actually the ones who is in charge.
This to me seems to be a justification of why China destined to be behind rather than a temporary setback due to circumstances.