The much-publicized cyber attacks against Google, Yahoo! and other IT multinationals, plus redoubled efforts by China-originated hackers to infiltrate American government agencies and technological firms, however, have taken Beijing's Internet-based gambit to an international level.

Whether the fast-emerging power can globalize its cyber-dictatorship depends in large measure on the outcome of its aggressive recruitment and training of IT-related experts.

Research and development in IT, including cyber-espionage and counter-espionage figure prominently in the 12th Five Year Plan (2011-2015) which is being drafted by both the central government and the People's Liberation Army (PLA).

President and Commander-in-Chief Hu Jintao has put expansion of the PLA's cyber-warfare capacity as a top priority of the defense and security forces in the coming decade.

Preferential policies are also being made available for civilian IT and telecommunications industries, which have since the 1980s been sharing resources and data with relevant units in the PLA, the paramilitary People's Armed Police and the Ministry of Public Security.

It is significant that while visiting Shanghai last week, President Hu gave a long pep talk to computer and telecom engineers in the metropolis. "We must win a prominent place in global telecommunications through acquiring technologies that are based on domestic [Chinese] research and development," Hu said. "We must assiduously attain breakthroughs in more critical core technologies."

While Western governments and companies have accused China-based hackers of pilfering a wide range of military intelligence, technology and commercial secrets, the Hu administration has justified its no-holds-barred development of cyber-warring capacity in the name of "IT sovereignty and security."

In response to Google's complaints about massive attacks against its Chinese operations and clients, a spokesman of the State Council said that "our country is at a crucial stage of reform and development … and properly guiding internet opinion is a major measure for protecting internet information security."

According to Minister of Public Security Meng Jianzhu, "the Internet has become a major vehicle through which anti-China forces are perpetrating their work of infiltration and sabotage."

On a tour of the provinces in late 2009, Meng even called upon the country's several tens of thousands of cyber police to boost cooperation with domestic IT companies.

"We should make good use of the fruits of [domestic] IT research and development so as to provide our prevention-and-control system with strong technological support," Meng said.

In early 2009, party and state authorities significantly boosted budgets for recruiting the best Chinese graduates in areas including computers, engineering, mathematics, and foreign languages.

Units such as the First Research Institute of the Ministry of Public Security, which has a staff of more than 1,200, have placed advertisements in official and private websites seeking software engineers and specialists in IT security.

It is well understood among the Chinese Internet community that the police as well as intelligence outfits under the PLA General Staff Department are paying big bucks to attract what insiders call "accomplished and patriotic hackers."

A number of such hacker-turned-IT specialists are believed to have been placed as "moles" inside the China operations of high-tech multinationals. Moreover, Chinese missions in the United States and other countries have the past year taken advantage of the recession in the West to recruit hundreds of Chinese graduates from the best computer-science departments in Western universities.

"Chinese IT graduates from top American universities are offered not only globally competitive salaries but fast-track promotion prospects," said a Beijing source close to the cyber-warfare establishment.

Another unique feature of China's cyber-war venture is the large number of "princelings" – the kin of senior cadres – who are involved in the fields of telecommunications and Net-related security.

Dr Jiang Mianheng, Vice-President of the prestigious Chinese Academy of Sciences and the eldest son of ex-president Jiang Zemin, has for more than a decade been a key figure in China's IT strategy. An electrical-engineering graduate from Bucknell University in Pennsylvania, Dr Jiang was among senior Shanghai cadres who accompanied supremo Hu on his recent tour of advanced IT plants in the East China metropolis.

The participation of prominent princelings is yet another reason behind the fast-paced expansion of the country's capacity in IT-related espionage and counter-espionage.

In internal speeches, President Hu and his advisers have expressed optimism that in this critical field of IT warfare, China can close the gap with the U.S. in 10 years or so.