It's a reference to Chinese characters not having been further developed in the direction of sound-indicating writing (as was done later in Japan and Korea). Full historical details, based on quite recent archeology in China, can be found in the writings of William Boltz. I searched for some examples of his writings that are online and not behind a paywall, but didn't find any convenient examples. His observation is that Chinese almost went in the direction of explicit syllable-writing (as Japanese has had for several centuries in the katakana and hiragana writing systems) but development in that direction ceased during the Han dynasty.

P.S. I just found, by browsing, that the Wikipedia articles about Chinese writing still need a lot of clean-up. Too bad.