The aim of the study is to describe and analyse from a security policy point of view, the development of capability and capacity for information operations (IO) and information warfare (IW) in China.The objective is to get an overall picture on doctrinal and strategic level of China´s capability, intention and ambition on the information arena over time. In the report examples are given on driving forces and enablers for development of IO/IW capabilities, available resources, means and methods as well as responsible organisations within People´s Liberation Army PLA and other security organisations for instance the Web police. Furthermore, the report discusses possible and likely Chinese activities on the information arena such as industrial espionage, computer network opeerations, hacking and distributed denial of service attacks against different target objects as well as deployment of trojans and virues. Some Chinese hacker groups are briefly described; their logic and behaviour on the Net. The report ends with a short discussion on how the Chinese development may affect the Swedish policy for information security.