Hackers are increasingly looking to the Far East, and China in particular, as the source of zombie PCs for botnets that can be used to launch denial of service attacks or conduct mass spammings.

The move has come to light in a quarterly report on 2006 traffic from email monitoring firm MessageLabs released today at the Infosec show.

The research found that only 18 per cent of malware traffic is coming from US computers, compared to over 40 per cent last year. China is now just behind the US in this regard, with 16 per cent of compromised computers.

"There are two reasons for this switch," said Mark Sunner, chief technology officer at MessageLabs.

"US users are taking more precautionary measures to stop their computers becoming compromised in the first place, and the protection in emerging markets is typically minimal making them an easier target."

Sunner explained that in addition to a geographical shift botnets are becoming much smaller, typically around 20,000 machines rather than hundreds of thousands in the past. This is an attempt to keep the networks under the security radar and avoid detection.

Virus writers have also been using this trick. The number of mass outbreak viruses has fallen consistently all year and there has been a worrying increase in smaller, customised viruses aimed at a particular company.

"We scan around a billion emails a week and usually see about two targeted viruses," said Sunner. "Now we're seeing a sharp rise which is very concerning. "

Intellectual property theft and the easy availability of virus tool-kits are fuelling the rise, according to MessageLabs.