What kind of censoring does China do about its history? If you're thinking of the GLF or the Cultural Revolution, then I can tell you that these are far from censored topics. Unless by "censored", you mean they don't keep harping on about how Mao killed "80 million" people.
I agree with you that there is a kind of "yellow peril" mentality in the West. What I don't agree is to term that mentality "ignorance". Ignorance implies that it can be remedied with information and communication. That is simply not happening.
the cultural revolution has been the subject of many "scar dramas" and books published afterward, this is understandable because the current ccp elites in china are descended from the very same people that suffered when mao pitted the red guards against the ruling establishment. after his death, they wanted to tell their stories of how they suffered and thus the positive legacy of the cultural revolution has more or less been overturned in the orthodox version of chinese history.
deng xiaoping for example was among mao's foremost targets, and many people in the ruling elite to this day have a grudge against mao, but they cannot refute him because of his popularity with the common people. i know this firsthand because i'm from hunan, and there's no place in the world that worships mao like hunan. even though the current regime allows criticism of the cultural revolution to a certain extent, direct and honest criticism of mao himself is at least supressed if we can't say prohibited.
a year ago i tried looking both on the chinese and western internet for the best objective biography on mao, because many of the books out there seem to carry a heavy bias either for or against him. in the end, many western commentators concluded that steven levine and alexander pantsov's "mao: the real story" is the most objective. what was interesting was that chinese commentators seemed to agree. (i am still interested in finding an objective book on mao from china if anyone here has found one)
events like the three years of hardship, (during the GLF) and the tumultuous political movements of the time like the anti-rightist campaign, the hundred flowers movement, etc; are not really taught to kids in history class in china. these events might be discussed privately among some individuals, but there are very few well-researched academic and sociological works to come out of the mainland that truly talk about them in an open way. and when they do they are not part of the mainstream historical discussion in schools and universities. because of this fact, many of the details of these hugely important events are relegated to the realm of hearsay.
similarly, open discussion of the 64 incident is completely prohibited in china. in fact, some of the government officials directly involved in the crackdown (like li peng) had to publish their memoirs on the incident in hong kong, and media references to 64 in china are still completely forbidden. this most definitely contributes toward an atmosphere of ignorance, intrigue, and rumours.
