It’s been almost a month since Google (GOOG) caused a global uproar by saying it no longer wanted to censor results of its Chinese search engine, Google.cn. Since then, analysts have touted China’s Internet search leader Baidu (BIDU) as a can’t-miss.

At first glance this seems reasonable enough – indeed, the share price of Baidu’s Nasdaq-listed unit has gone up 10.5% since Google’s January 12 announcement, and it just posted better-than-expected results for the fourth quarter of 2009.

Is China’s reaction to last week’s announced US arms sale to Taiwan really all that more strident than in the past? Should America be worried? To read a New York Times article published last week, citing the usual ragbag of US-based “China experts”, you might conclude so.

I don’t buy it. China is not set, contrary to such reports, firmly on a course to antagonize America. It is, however, a great power with legitimate national interests to assert and protect. Sometimes those will clash with America’s national interests. But the bilateral relationship also has a root system of common goals and shared admiration.

I have another paper available for download outlining my China short thesis available for subscribers here: China Macro Discussion 2-4-10 2010-02-04 13:10:26 922.25 Kb.

In addition to the issue-specific ETFs (Chinese ETFs with Exposure to Real Estate, Banks, Insurance and Export Industrials) that I have already proferred, I will be offering my viewpoints on specific companies across various geographic regions as well.