The biggest business risk in China is probably the government. Case in point: Motley Fool Stock Advisor recommendation Sina (NASDAQ:SINA).

In March, the company disclosed that the Chinese government crackdown on mobile advertising linked to fortune-telling services was going to hurt its SMS, or short message service, results. Fortune-telling was extremely popular, but not with those in power.

Then, in September, the government announced new regulations for news reporting. News sites will be encouraged to report progress on economic and social programs, but there are now fines for reporting false or distorted information. There is no word yet on the impact from these regulations.

Thursday night, Sina reported third-quarter results that were below analyst expectations. Revenue, expected to be $49 million to $51.8 million, came in at $49.6 million -- a 5% decline on a year-over-year basis. Net income really missed the mark: Instead of $0.23 to $0.24 a share, it came in at $0.16 -- a 36% decline when compared with the year-ago period.

Sales and marketing expenses mushroomed 47.8% and are the main factor in the earnings shortfall. TV and radio advertising are being used to pump life back into the SMS service, and it's working. SMS revenue was up 11% from the second quarter. Overall, the company reported strength in its advertising business, as revenues increased 24% compared with the year-ago period, while non-advertising revenue declined 22% (on adjustments to the product mix and a change in billing methods from partner China Mobile).

As mixed as the results were, they did not eat into Sina's cash hoard. Since the previous quarter, cash and marketable securities increased $4.5 million to $288.6 million ($4.91 per $24.00 share). And Sina is debt-free.

For the fourth quarter, the company's revenue estimate is below that of analysts', although quarter-to-quarter growth could be up almost 7% if sales hit the high end of Sina's guidance. That would be excellent growth. Sina's earnings guidance is within analyst projections and would be up 40% to 50% from this quarter's results, though they would represent 20% to 30% declines from the comparable period. Said another way, earnings are expected to get back to more robust levels.

For investors willing to overlook the Chinese government's changing regulations, Sina is a compelling value if earnings are, in fact, back on track. Analysts expect earnings growth of 28% annually for the next five years. The stock is trading for 20.7 times 2006 earnings, a significant discount to the earnings growth rate.

Motley Fool Rule Breakers pick Shanda (NASDAQ:SNDA), which trades for 13.3 times 2006 earnings and used recent weakness in Sina shares to buy a stake, is also worth considering. Shanda also recently announced a $50 million share repurchase program.

Ask yourself: Why buy high-flying premium-priced U.S. stocks like Yahoo! (NASDAQ:YHOO), Google (NASDAQ:GOOG), and Starbucks (NASDAQ:SBUX) to get Chinese "exposure" (ah, love that word) when you can buy Chinese companies selling at price-to-earnings ratios that are far less than their growth rate? But look carefully before jumping, folks, because the geopolitical environment for media purveyors in China is still anything but stable.

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Fool contributor W.D. Crotty does not own any shares in the companies mentioned. Click here to see The Motley Fool's disclosure policy.