"These young hackers are tolerated by the regime provided that they do not conduct attacks inside of China", he adds.

One of the biggest problems experts say is trying to prove where a cyber attack originates from, and that they say allows hackers like Xiao Chen to operate in a virtual world of deniability.

And across China, there could be thousands just like him, all trying to prove themselves against some of the most secure Web sites in the world.

At a congressional hearing in Washington last week, administration officials testified that the government's cyber initiative has fallen far short of what is required. Most alarming, the officials said, there has never been a full At a congressional hearing in Washington last week, administration officials testified that the government's cyber initiative has fallen far short of what is required. Most alarming, the officials said, there has never been a full damage assessment of federal agency networks.