Also spinning off that post, I'd like to reiterate a couple of points from this post and this one. As far as I can see, not much has changed since Beijing was identified as the world's biggest concentration of compromised Windows machines; Spamhaus ROKSO looks pretty bad for the big provincial networks in ChinaNet and China Unicom, and the Abuseat Composite Block List also shows the Chinese Internet as a very large source of spam and nasties in general.
By network rather than by country, ChinaNet is still the eighth spammiest domain on the Internet. Arbor Networks has some interesting charts on fast-flux DNS abuse, which show .cn as being the biggest real TLD for this particular form of mischief. Tellingly, it takes on average 7.8 days to get rid of a domain taster in .cn, as against 1.6 for .eu; however, Verisign is not doing great either, as it takes 7.23 days on average to get rid of one from .com.
Arguably, the correct model here isn't some kind of cold war vision of satellites and missiles and invisible hackers, but either a wild frontier or a failed state - which are of course the same thing, looked at from optimistic or pessimistic points of view.
That China has "Internet police" is beside the point. Afghanistan has a force called the Civil Order Police, Italy has Tax Police, and the US has something called the Central Intelligence Agency, but you wouldn't necessarily expect civil order to be maintained, taxes to be paid, or signs of intelligence. The UK even has a commission on standards in public life, and we know that's a joke.