The folks at honeyblog.org has written two nice papers on botnets and underground economy in China. They are working with the Chinese Honeynet Project to come up with these two papers.The underground economy paper is especially interesting since it summarize the how money is generated and flow through the underground system.

Links to the paper:

Characterizing the IRC-based Botnet Phenomenon

Studying Malicious Websites and the Underground Economy on the Chinese Web