I'm not sure I'd want to allow China to sell a "secure operating system" to government agencies - and not be able to demand source code access as part of the bidding process.
I'm not sure I'd want a US company to supply hardware/OS to schools, and not be able to stipulate source code availability in the contract.
I'm not sure if this is the kind of things that this makes illegal -- but I wouldn't be surprised if it is.