I am well aware that China grows wheat, otherwise where would nuddles come from? I also know that China had water mills early on.

The argument presented here is not that China had no clue how to build a water wheel or didn't ever have need to grind grain to make flower.

Rather the argument here is a about scale and prevalence. Wheat growing and mill construction happened at a much larger scale in Europe for the reasons outlined: Europe had more locations suitable for building mills and wheat being a more dominant crop in Europe meant Europeans had more need of mills.

Finally the collapse of European civilization probably played a role. The fact that China never had a collapse as deep as Europe had after the fall of Rome ironically played in the favor of Europe in the end. With significantly reduced population, there was a much higher pressure in Europe to build machinery to automate tasks than in China.

I know China had water powered textile mills but that was for hemp and they fell out of use because cotton was far more economical to grow. Cotton was a far more difficult crop to create machinery for and thus machinery fell out of use. Hundreds of years before Britain built cotton textile mills they had silk mills in Italy powered by water wheels. However Italy like China was no an ideal place for building water weels, and so an industrial revolution could never really get started in Italy.

Southern Europe, much like China lacked the climate suitable for water wheels which would work reliably through the year. Northern Europe had that which is a major reason why Norhern Europe industrialized before the South.

I get into more of the details of why no other country but England really could ever have been the start of the industrial revolution: https://medium.com/lessons-from-history/why-england-industrialized-first-d09bc797cf7f

Most other countries lacked crucial ingredients, whether climate, geography, resources or access to technology.