I have previously covered the rough history of homosexuality in ancient China here, from which you can see that homosexuality was not much of an issue during those times.

Part of the reason was due to most people having multiple sexual partners and lovers, thus as long as one had an heir (essential to proving one's filial piety), it did not really matter if they had same-sex lovers as well. With this in mind, it can be viewed that monogamy (something of an European influence) was one of the causes of the decline in acceptance of homosexuality, since if one cannot change partners and homosexuals could not give birth, then it would be unfilial to be a homosexual given the lack of children such a union would produce. And to be unfilial is a big offence in Chinese society.

Therefore, though I would not say it is the direct cause of lack of homosexual acceptance in modern China, European influence may have played a part in homosexual relations' decline.