Well.. I did say I can't understand it. The article claims that this will help MS wean China users away from Widows XP. Hard to understand the logic.
Given how prevalent and commonplace piracy is, providing an upgraded version at no cost makes the most sense from a market share perspective, And bringing them forward to a newer platform provides further opportunities to sell newer products, both those that can be pirated, as well as those that cannot (such as their subscription services). It can also be considered to be a move against counterfeiters and malware authors, who might make their living selling pirated software copies and inserting malware into those copies before doing so.
Microsoft wants ot push their subscription-based services such as Office 365, Skype, and arguably Azure. Many of these require Windows 8 or later due to System services and capabilities they use. By effectively providing Windows 10 for free to practically everybody not only with a Windows 7 or 8 license but also to those using pirate copies, Microsoft is ensuring that those subscription-based services have a homogenous platform and can be used on more systems.