Divided they stood, together they fell

Although China had been ahead of Europe in technological development for centuries in ancient times, Europe eventually caught up and outdid China. The causes can be retraced when comparing maps of the two regions.

Europe is home to a large number of significant peninsulas and islands, such as the British isles, Scandinavia, Denmark, Iberia, Sardinia, Sicily, Italy and Greece. At the same time the continent is divided by mountain ranges such as the Alps and the Pyrenees. As a result Europe was largely fragmented into a lot of independent states which were strong enough to defend themselves and keep their own languages and cultures. The natural barriers on the continent were enough to help divide the states, but they didn't hold back the knowledge of new technologies. This meant that when one state would disregard or ban a certain technology, another would adopt it and eventually the first state would have to adopt it as well to prevent lagging behind (and thus risking to be conquered).

For China the case seems to be the opposite because its coast is hardly indented, its rivers are much wider than Europe's (and thus provide an easier means of transportation). For this reason China's regions were united early (largely because of conquest). Now, when a technology was rejected inside China by whomever its leader at the time was, the whole of China would adhere to it and there were no other states which would have forced China to readopt it.

This is one of the many interesting conclusions Jared Diamond draws in his book Guns, Germs and Steel.