A pressing question of theoretical history is the question of why Europe managed to overcome the thresh-old of industrialization on its own and break out of the Malthusian trap, while China had to adopt Western experience for a long time and catch up with Europe? An explanation of China’s lagging behind in the late Modern period pointing to the specifics of the Asian mode of production or irrigation society, is useful, but not sufficient. A convincing explanation is that this is due to the shortage of certain resources and the underdevelopment of capitalism. However, the underdevelopment of capitalism itself needs to be explained. The article concludes that Europe’s superiority over China in the modern era is the result of the advantage of backwardness in the pre–modern era. China, unlike Europe, managed to create a huge empire that encompassed the entire ecumene, as well as an effective bureaucracy to manage it, and all this thanks to the effective ideology of an agrarian society – neo-Confucianism. However, it was precisely this success in adapting to the demands of the agrarian era that prevented it from reaching the industrial level of development on its own.