What is the most likely explanation for why the Shang had little interaction with non-Chinese cultures?

Answer 1

First of all, who says?
Although the habit is to treat Chinese dynasties as succeeding, there is no reason they should not have overlapped.
That said, they had, as the Chinese always had, nomadic tribes to the north and west and the bleak ocean to the east. Mostly mountains rose to the south. The nomads were unfriendly. Nomadic tribes and settled civilizations are usually not friendly when they interact. Nomads are tough and poor. Townspeople are not so tough but have stuff to steal, including their selves.
By the way, there seems to be some indication that the horse drawn chariot was known to them. That did not come from their neighboring Mongol tribes who rode horses. It was the Indo-European (Aryan) tribes from much further west who used chariots. They became mostly Greeks and Persians and such. That is pretty far reaching interaction.
The geography was tough for friendly relations. The Gobi desert and the mountain ranges separated them from India and the Caspian Sea region.