This is a children’s song about the grass-mud horses faced a problem with the river crabs invading their habitat, devouring their grassland which they are depended on for surviving.
The grass-mud horse in Chinese sounds like “fuck your mother”. The song also used other dirty puns like the desert named “ma la ge bi” in Chinese sounds like another nasty curse. The song represented the people’s protest against the Chinese government’s censorship especially in the cyberspace.
From YouTube and other sources:
In spoken Chinese, “river crab” sounds very much like “harmony,” which in China’s cyberspace has become a synonym for censorship. Censored bloggers often say their posts have been “harmonized” — a term directly derived from President Hu Jintao’s regular exhortations for Chinese citizens to create a harmonious society.”
Here is another children’s song about grass-mud horse finally defeated river crab. Its melody is borrowed from famous cartoon “Smurfs”, Chinese version of the theme song.
Read more on this at Herald Tribune