“The Chinese government attaches great importance to protecting the safe flow of Internet information, actively guides people to manage Web sites in accordance with the law and use the Internet in a wholesome and correct way,” the paper reads. “The Decision of the National People’s Congress Standing Committee on Guarding Internet Security, Regulations on Telecommunications of the People’s Republic of China and Measures on the Administration of Internet Information Services stipulate that no organization or individual may produce, duplicate, announce or disseminate information having the following contents…”

What follows is a list so broad and vague it could easily be applied to nearly any speech Beijing finds undesirable: “subverting state power…propagating superstitious ideas…spreading rumors…and other contents forbidden by laws and administrative regulations.”

But steer clear of those and you’re free to say what you like because “Chinese citizens fully enjoy freedom of speech on the Internet”–according to this white paper, anyway.

The Constitution of the People’s Republic of China confers on Chinese citizens the right to free speech. With their right to freedom of speech on the Internet protected by the law, they can voice their opinions in various ways on the Internet. Vigorous online ideas exchange is a major characteristic of China’s Internet development, and the huge quantity of BBS posts and blog articles is far beyond that of any other country….The Chinese government has actively created conditions for the people to supervise the government, and attaches great importance to the Internet’s role in supervision….The Internet provides unprecedented convenience and a direct channel for the people to exercise their right to know, to participate, to be heard and to oversee, and is playing an increasingly important role in helping the government get to know the people’s wishes, meet their needs and safeguard their interests. The Chinese government is determined to unswervingly safeguard the freedom of speech on the Internet enjoyed by Chinese citizens in accordance with the law.

And if “safeguarding” freedom of speech involves, say, blocking YouTube, Picasa and a bunch of other services offered by Google (GOOG)? Well, I guess that’s just the Chinese government “voicing its opinion” in this “vigorous online ideas exchange.”

In a white paper published Tuesday, the Institute decried the deal as one that “could end up as a black hole that swallows up Yahoo, despite Yahoo’s intentions to stay in the business.”

Apparently, it doesn’t quite buy Google’s claims of altruisim. The company wants only to aid a floundering ally? Really?

“It strains credulity … to believe that Google would agree to an arrangement that gives its chief rival $800 million to invest in efforts that would, if successful, reduce Google’s market power,” the AAI wrote in its white paper. “… The agreement between Google and Yahoo is not a merger, of course, but serious concerns have been raised that the agreement will effectively result over time in Google’s acquisition of all or at least a substantial part of Yahoo’s paid search business.”

Still, the agreement could just as easily not do that. Said the AAI, “It is possible that the transaction will throw off sufficient revenue for Yahoo to not only protect its core business during difficult economic times but to underwrite its plans to become a stronger competitor than it now is.”

So, Google (GOOG) is either a friendly shoulder on which Yahoo (YHOO) can steady itself or a vast rainbow-colored black hole waiting to engulf it. Given that either-or, what to do?

Says the AAI: “The government should insist on a consent decree which preserves Yahoo’s incentives to remain in the paid search market. If such a consent decree cannot be achieved, then the government should seek an injunction to prevent Google and Yahoo from implementing their agreement.”