The reason is simple. Windows8 has more cloud integration (e.g. you can trivially integrate with OneDrive and Microsoft Accounts), and data associated with those services is held on US servers that can be subpoenaed by the US government.
That's the bank details and phone numbers that the Chinese government are talking about. Windows8 is objectively more secure than Windows7, but it's also much more likely to have data you provide associated with your account stored in the cloud than Windows7 too. China is of course carefully avoiding mentioning that all of these features are off by default because they don't fit the narrative, but that's how politics goes.
That's what this is all about, combined with a general desire in China to bash US companies in order to get foreign policy concessions from the US government.
You see it here with Microsoft and Windows (because it's being reported loudly), but exactly the same thing happened this week with Cisco, and has happened in the past with Google.
I think if you've not created your local account that is linked to Live account, those files would not be uploaded to cloud, but then again maybe they've got horrified when they see their files could be uploaded to cloud without their consent and stopped further studies. LOL