This week, the US Military declared China a "cyber threat" and says they are continuing to wage war in cyberspace using a doctrine of "non-contact warfare." (Source is here). This comes after Germany's accusations in August that the Chinese military sponsored attacks against computers owned by Germany's top officials. In December, the UK's Mi5 warned corporations to be cautious of Chinese attacks.
These recent attacks have convinced the Bush administration to allocate $30 billion towards securing federal networks over the next five to seven years.
The world seems to be getting increasingly suspicious and edgy about China these days, and it is not surprising, considering their recent ability to knock satellites out of orbit. This capability, combined with information garnered from penetration of defense and intelligence networks, would give them unparalleled first strike capabilities.
Armies from developed nations in the west and Europe rely heavily on satellite communications and guidance system for munitions deployment, early detection and warning, and logistical commands. This is compounded by market and financial infrastructure that is entirely reliant on computer systems and networks with national and global communication.
Considering China's move to firewall their entire country and strictly regulate all information into and out of the country, they have much to do if they intend to ease the minds of the rest of the world.