World number one Selby was never comfortable during his 5-0 win over Li Hang in the first round despite contributing a 139 - the highest break of the tournament so far - and has opted to withdraw as he prepares for the World Championship.
The game's most celebrated event begins at Sheffield's Crucible Theatre on April 21.
"I'm absolutely gutted to have to pull out and to let down the Chinese fans as I was really looking forward to playing Ding tonight," said Selby, who lost 9-6 to Ding in the Welsh Open final.
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"But I have been suffering with neck pain and I struggled through my first round match. I don't want to do any more damage, especially with the World Championship coming up, so I'm going back to the UK to get some treatment. I look forward to coming back to China as I love playing here."
Ding will could face compatriot Lu Ning in the last eight with the teenager meeting Ali Carter in the last 16 later on Thursday.
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