According to a Washington Post article today, China leads the world in hacked computers. In the last quarter of 2009, China had more infected computers than any other nation in the world. The majority of these infections are in the form of botnets. Botnets are a collection of infected or zombie machines controled by a master computer. These computers can then be used in coordinated attacks of targeted information systems, usually causing a Distributed Denial of Service attack (DDoS).
The article states that China led the last quarter of 2009 with 1,095,000 infected computers. The United States followed with 1,057,000 infections. China is considered most vulnerable because of pirated operating systems and lack of patching. Read the entire article at the Washington Post.