It's used loosely as usually seen in the computer industry. Think hardware, as in "commodity boxes." Any industrialized country can build them, it's not a specialty thing anymore, and prices have fallen because of it. Same with software now, any industrialized country can do it, and the prices have been falling for a long time (even on software with no real open source alternative in its target market, such as Photoshop).
With this fact, it is useless to worry about China getting an operating system. They easily have the resources to write their own, just as good as Linux, so them getting Linux only saves them a little time and deprives proprietary OS vendors of money (GE's real objection).
It is useless to worry about China? Ridiculous, as is the notion they could build something equal on their own. Nor could Cuba, Iran, North Korea, etc, all of which are standardizing on the free software you want to give them. You even allow them to rename and resell the products under a different name, as if there's absolutely nothing wrong with that, and attack those of us who know there is.