Why china fell behind western Europe in economic strength from 18th century onward?

The Chinese kept economy self centered within China and import/export merely for limited goods. This method kept Chinese economy closed and non-related/non-dependent to other countries especially west. It did not directly challenge colonial ambitions of western countries which colonized nations and used labor and raw materials for advancement in industrial age.

Since the foundation of PRC (Revolution 1948-50), China went for massive land reforms and nationalizes all economy including banking, industry and all forms of private capital. Following are main features why China remained behind Western Europe for a period:

Internal Market phenomenon

Chinese market was limited to its own territories and no significant international trade. This resulted in negative growth and burden on limited incomes available to the ruler. The market efficiency was minimal and operational efficiency was not practiced.

Limited global trade hegemony

The Western powers made their strength from occupying fertile areas around world for raw material, industrial advancement and exports to these territories which were under their influence. On the other hand, China was not open towards international trade or demand.

Lack of technological advancement and automation

As the market was limited, no research & development was sought after over decades and the economy mostly remained basic agrarian. Chinese were unable to develop knowledge, skills and technology to improve their production.

Huge population to feed

Inherently China is gifted with huge population which needs to be fed, support and provide health service. This discerns the rulers to any other focus than to meet basic needs.

Low agricultural produce

As the economy was agriculture based, without research and development, without investment in seed/field development, the crop yield remain low and cyclical effect put strain on national income.

Self Sufficient policy of closed doors

The Chinese kept policy of closed doors due to above problems and feared that they will be unable to spare their goods and services for foreign nations in spite of several approaches by British and other colonial powers.