What they found was quite interesting. They showed the expected differences in test scores in Mechanics and E&M between US students and Chinese students, with the Chinese students having higher peak scores than US students. However, when they used the standard test for scientific reasoning (LCTSR test), both groups of students essentially show no difference in their scientific reasoning ability!
The results of the LCTSR test show a completely different pattern. The distributions of the Chinese and U.S. students are nearly identical. Analyses (15) suggest that the similarities are real and not an artifact of a possible ceiling effect. The results suggest that the large differences in K-12 STEM education between the United States and China do not cause much variation in students' scientific-reasoning abilities. The results from this study are consistent with existing research, which suggests that current education and assessment in the STEM disciplines often emphasize factual recall over deep understanding of science reasoning.
I think this is very revealing. It is especially vital if we want to get students that can make such critical analysis. The researches went on to say:
What can researchers and educators do to help students develop scientific-reasoning ability? Relations between instructional methods and the development of scientific reasoning have been widely studied and have shown that inquiry-based science instruction promotes scientific-reasoning abilities. The current style of content-rich STEM education, even when carried out at a rigorous level, has little impact on the development of students' scientific-reasoning abilities. It seems that it is not what we teach, but rather how we teach, that makes a difference in student learning of higher- order abilities in science reasoning. Because students ideally need to develop both content knowledge and transferable reasoning skills, researchers and educators must invest more in the development of a balanced method of education, such as incorporating more inquiry-based learning that targets both goals.
I hate to sound like a broken record (do people even know what that means anymore?), but that is the main purpose for my suggestion in revamping the undergraduate intro physics labs. In those lab exercises, knowing the physics behind what they are doing is secondary to their ability to arrive at how things behave and how two variables are related to each other. So they have nothing to memorize, only things to observe and study.
So yes, I like this paper because it clearly confirms what I think is happening in our schools.
Edit: It appears that this work is getting quite a bit of media coverage. Here's one, and another one, for example.
 L. Bao et al. Science v.323, p.586 (2009).