I would like to point out Microsoft's own definition of malware.
Let us take the easy one first. "Malware" is short for malicious software and is typically used as a catch-all term to refer to any software designed to cause damage to a single computer, server, or computer network, whether it's a virus, spyware, et al.
-http://www.microsoft.com/technet/security/alerts/info/malware.mspx
Now the fact is that this software "causes damage" to a computer, by MS own definition this is malware. IF however, the software came with MS Office and only stopped MS Office from working, and MS put a warning on the software when being installed then it would not be malware.
I'm wary of chipping in here because I'd had this debate elsewhere already :D
The claim in china is that MS 'hacked' into people computers and installed this software without their permission. The analogy has been likened to a car manufacturer breaking into people garages just to checked if they happened to rob any of their cars.
The complaint describes Microsoft as "the biggest hacker in China with its intrusion into users' computer systems without their agreement or any judicial authority".
"Microsoft's measure will cause serious functional damage to users' computers and, according to China's Criminal Law, the company can stand accused of breaching and hacking into [the] computer systems of Chinese [users]," it added. -http://www.vnunet.com/vnunet/news/2228878/microsoft-sued-anti-piracy
Ms are even getting sued in China (http://www.vnunet.com/vnunet/news/2228878/microsoft-sued-anti-piracy) over this. Thing is the claim is probably false and that people installed the WGA program themselves.