July 5, 2012: India recently confirmed rumors that the computer networks of its Eastern Naval Command (ENC) had been hacked and information sent back to Internet addresses in China. The ENC handles operations off the east coast of India and points east (like the Straits of Malacca and the South China Sea). This includes the growing number of Indian Navy operations eastward, including in the South China Sea.
The Chinese Navy has been more active near the Straits of Malacca and in the Indian Ocean because of the large amount of Chinese shipping passing through the area. This includes Chinese exports and most of Chinese oil imports (along with minerals from Africa). The South China Sea is important to China because China claims the entire area and any natural resources in the water or beneath the ocean floor. This is disputed by other nations that border the South China Sea. These nervous neighbors of China (mainly Philippines, Japan, Taiwan, Indonesia, and Vietnam) have been forming an alliance and are enticing the United States, India, and Russia to help out.
India is in the process of shifting the majority of its warships to the ENC and away from the Western Naval Command, which for decades controlled most of the fleet and stood prepared to deal with Pakistan in another war. Pakistan has declined as a major threat and has been replaced by China. This explains why China would be interested in what the Indian Navy is up to, especially the ENC. China denies any involvement in hacking ENC networks.