Anytime nationalistic pride is stirred hard, it's hard to be not biased. So my bias is pretty pro-Chinese and anti-West, so just to start off there.

>Chinese philosophy seems to me to be mostly about society and the duty of men

You are referring to Confucius and also perhaps the highly hierarchical nature of the Chinese community party. Chinese philosophy in general is a mix of Taoism, Buddhism and Confuciusm (http://en.wikipedia.org/wiki/Vinegar_tasters) with conflicting tenets that respectively focuses on individual conduct, moral values and social harmony. In general, Western media focuses on the governance of the Communist party; that’s analogous to reduce Western philosophy down to Locke and Mills and ignoring Heidegger, Nietzsche and Rousseau that is concerned more with the individual development than the social contract/utility. Note that a lot of Westerners also attempt to find spiritual alternative in Zen Buddhism which is of Chinese origin.

>While Europe was worse off early on, it allowed the region to discover math and science and make use of it.

I’d argue that the reason for the lack of a Chinese industrial revolution is not because any inherent “thought” deficit but due to the Empire’s decision to employ a Closed Door Policy and Sea Ban (http://en.wikipedia.org/wiki/Haijin). Compare China during the Sea Ban and Japan’s Meiji Restoration at the time or even more recent economic development of South Korea, Singapore and Taiwan (all of which are very Confucian) as an argument against any culture having an monopoly on innovation. Unfortunately, at the time the traditional Chinese culture is very inward looking and arrogant toward foreign thought because we thought we were the best. But anytime you become close-minded and think that you are the best in the world, you close yourself to alternative ideas beyond your borders and will inevitably decline. Thankfully, we’ve learned this lesson in the 20th century.

>China had a big fleet, but cancelled the project … China invented gun powder, but they didn't use it to gain a military advantage.

Colonial conquest of foreign cultures is a very Western concept. Note that China at one time had the most population and military power and built a great wall at the Northern boundary; because China is more interested in governing from the within. Even with Sinosphere neighbors at the time that were heavily influenced by Chinese culture, Emperors were happier to have tributary states than conquering the neighboring countries.

>Traditional Chinese Medicine used penicillin indirectly, but never managed to understand or extract it.

That’s an implicit value judgment that Western medicine that focuses on pharmacodynamics and pharmakinetics is superior than the holistic take of Chinese medicine. Again note the Western movement to seek out holistic medicine and more importantly, major Western pharmaceutical companies push for personal genomics treatment (http://en.wikipedia.org/wiki/Personal_genomics) which takes into account the patient’s individual genetic variation. This is not an attempt to conflate Chinese medicine with 23andme, but rather the perspective that modern medicine is constantly evolving - from the discrete scientific method of breaking down chemicals to their individual interactions to a systematic view of complex metabolic pathways and cascade signaling networks, which echoes the Chinese medicine’s idea of feedback cycle of Qi.