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Just something to keep in mind when you listen to yet another big money guy tell you how dangerous China’s stock markets are now: they’re probably buying. Or will soon do so.

I had this thought as I listened Friday to a Bloomberg interview with George Soros from the Davos World Economic Forum.

China’s stock market is “overheating” and policy makers should seek to temper its gains, Soros said.

As readers know, I think fears that China’s government will miscalculate and slow the economy more than they intended are reasonable. Reasonable but over blown. (For why see my post http://jubakpicks.com/2010/01/28/the-rout-in-global-stocks-is-a-tempest-in-the-teapot-of-chinas-command-economy/ )

But it is important at this juncture, with China’s stocks at a four-month low, to remember that there’s a battle going on over when China will end its currency peg against the U.S. dollar and let the renminbi start to appreciate again.

And the existence of that battle should influence how you interpret any guru’s opinions on the dangers and opportunities in China’s stock market.

On the one side are officials in Beijing who want to delay the end of the peg until they’re absolutely sure that Chinese exports are strong enough to take a very gradual climb in the value of the renminbi that would make China’s exports more expensive in world markets.

On the other side, are big traders, who are betting that later or sooner China will have to allow its currency to appreciate again.

The bets right now say that the earliest would be mid-March to coincide with the National People’s Congress and to put as much space between the announcement and President Hu Jintao’s visit to Washington in April. The thinking is that no one in Beijing wants to give the impression that China had given in to U.S. pressure to let its currency appreciate by timing an announcement too close to the visit..

We’re not talking about a huge amount of appreciation when it happens. The consensus forecast says about 3% in 2010. China isn’t about to abandon its control of the currency and let it appreciate willy-nilly.

But with enough leverage, a 3% move can be very profitable. So the play now would be to borrow cheap in the yen market and then buy Chinese assets, the more liquid the better.

And while you’re buying it would be great if a constant stream of high profile negative pronouncements kept prices from climbing in reaction. Expressions of worry about the possibility of run-away inflation in China leading to more tightening would do the trick.

I’m not saying that there’s no danger in China’s stock market or that every bit of negativity should be discounted. (And I sure don’t know the trading position of Soros or anyone else commenting on a China bubble.)

But right now I’d sure make a big distinction between negative opinions coming from investors who are and have been in China for the long haul and from traders with shorter time horizons who are constantly scouring the world for situations where they can turn short-term fears to their advantage.