In the past few years, criminals posing as security experts have begun calling small-business owners, offering their services, Henderson said. If they're not hired, they simply attack the business, typically with distributed denial of service (DDOS) attacks, unless they are paid. "We're starting to see Chinese hackers hacking internally now, too," he said.

Dailin reportedly was arrested after he trained a DDOS attack on rival hacker groups. His victims went to authorities with evidence.

With China's economy struggling, some IT professionals have begun turning to crime in the past two years, Beijing-based security expert Wei Zhao said recently. "They cannot easily find jobs, maybe the security market is too small for them," he said in an interview.

Zhao, the CEO of security consultancy Knownsec, called China "the world's malware factory," saying that the country has become a major source of online attacks and so-called zero-day attacks, which target previously undisclosed software flaws.

In recent months, Chinese hackers have gained fame for launching widespread attacks against programs such as Internet Explorer and Adobe Flash, but they have also targeted popular local programs such as Xunlei, QQ and UUSee.