I agree; this possible alliance is the single biggest risk we face. Within this "axis of evil," China could supply various kinds of essential technical expertise and other behind-the-scenes support, while the Islamic extremists would supply soldiers with fanatical zeal and mobs bent on destruction; the Islamic terrorists would also provide plausible deniability for China.
As for this article itself, many of the details are not very believable technically, but the overall thrust is.
I'd like to point out a few quotes from the article, followed by some possibly related information from September, 2001:
...after the Sept. 11 attacks, air traffic controllers brought down every commercial plane in the air. "If there had been a cyber-attack at the same time that prevented them from doing that," he said, "the magnitude of the event could have been much greater."
...
"I don't think they are capable of bringing a major segment of this country to its knees using cyber-attack alone," said an official representing the current consensus, but "they would be able to conduct an integrated attack using a combination of physical and cyber resources and get an amplification of consequences."
...
Sources said the government did not learn crucial details about September's Nimda worm, which caused an estimated $530 million in damage, until the stricken companies began firing their security executives.
Nimda was released exactly one week, probably to the minute, after the 9/11 attack. And this was on the same date, 9/18/2001, that the first anthrax mailings were postmarked.
Nimda is the most virulent worm to hit the Internet yet, propagating via a variety of methods. And it placed back doors on the compromised computers, leaving them wide open to possible further misuse at a later date.
Although the origin of Nimda is unknown, the best guess, for a variety of reasons, is China.
http://www.freerepublic.com/focus/news/692331/posts
The Chinese military is preparing to launch new "exploratory" cyber-attacks against U.S. defense and civilian computer networks and systems as part of Beijing's continuing efforts to level the playing field against the American military, according to a noted intelligence bulletin.
Quoting Asian sources, the China Reform Monitor, or CRM a publication of the American Foreign Policy Council reported Wednesday that the attacks are scheduled to take place in early summer.