Abstract: Although the Californian school ruled that the "Great Divergence" of the Chinese and western economies was in the late 18th century, there was no denying that the two sides had already buried many of the factors. By looking at the various aspects of the development of the handicraft industry in China and Western Europe in the 7th and 14th centuries, this paper holds that the development trajectories and characteristics of the two are similar, but the internal mechanism is still quite different: First, the technological innovation path is different as the driving force of development. The technological innovation of urban handicraft industry in China is mainly complicated and refined, while Western Europe develops along the path of mechanization and automation. The second is the market mechanism that affects the development space is different. The links between the various links and departments of the urban handicraft industry in Western Europe mainly depend on the regional foreign market or overseas market exchange. China is the center of the “Skinnerian Model" market, which provides handicraft products to the high market level by level. The difference between internal drive and external inducement force caused the "Great Divergence" in the economic fate of China and Western Europe after the industrial revolution.