Possibly just that they have update mechanisms supported through US corporate channels, by which the NSA could push some individual Chinese-government official a one-time backdoor with no one being the wiser. (Which, you know, has happened.)

That's more just a reason to create your own Linux distro, though.

I think they mean security as in national security, not software security. The CCP believes it is in a "culture war" with the West and the Internet is a big part of it. Free software gives users too much freedom and they would prefer to have as much control as possible.

It seems to be the classic "security through obscurity" instance.

Not at all. They didn't say closed source OSs were more secure -- they said that EVEN OSS OSs were not secure enough for their needs.

For an example of what that could mean, check the sibling comment.

> open-source [whatever] poses security risks

That's exactly what I here from military IT management all the time. And I used to here from the rare Microsoft booster I came across in my university's IT-land. Makes you wonder if they ever took a math class, let alone wrote a line of code. I'm pretty sure it's a Microsoft sales talking point.