In America a degree is a piece of paper. I could go to my college and ask for a replacement and they'll give me one for $50-100.
A company could call my college and verify I earned a degree without ever seeing a piece of paper.
I know I've read something similar to what you are saying, so I don't think your comment was bad faith, but I forget the specific mechanics of the type of coercion you are talking about.
I suspect it might be China invalidating a Chinese citizens degree if they do the wrong thing or China invalidating the verification of a degree that's respected in China, leaving a person in China without credentials that are respected in China. Alternatively it might be about controlling people who earned a degree in China.
I couldn't find the type of coercion you were talking easily with google. A simple article explaining the mechanics of what you're talking about would likely clear everything up.
If it’s that simple he will be relieved to here it. Frankly I’m not sure why it’s such a big deal either.