It is a matter for the USA and the EU who they want to sell arms to. If the EU don't see a benefit in selling arms to China, then it is within their rights to choose not to. However, I will discuss some of the background:
In 1989 there was a violent end to the Tiananmen Square Protests, in which the Chinese government and Chinese army killed many hundred of its own citizens with assault rifles and tanks.
The scale of this event, occurring outside of war, in a country with a stable government is unprecedented in modern times. There has been a continuity of Government since the killings. The Government of China has not expressed an apology, or regret for the killings. In these circumstances, it is reasonable to suppose that the Chinese government, placed in a similar situation, would act the same way.
It would be unacceptable to many in the EU and USA for weapons to be used for killing protestors in this way, and aware of this the EU and USA continue to prevent arms exports to China.
The Human Rights record in Saudi Arabia is poor, and many are opposed to arms sales to the Saudi government, however, there has not been a major massacre of protesters in Saudi Arabia that is comparable.