Maybe you missed it, but documentation and photos of NSA facilities where they intercepted Cisco equipment being shipped and installed hardware and software bugs in it. By bugs I mean spying devices, backdoors and the like. The hardware ones are particularly nasty because they are pretty much impossible to detect in software and obviously can't be got rid by reloading known good software images. Clearly the NSA disagrees with you here and considers it worth doing.
Well, considering that every single attempt to remotely compromise even my personal home router originated in China, and we've also seen article after article about Chinese hackers since some time in 2002, they know security.
There are undoubtedly lots of criminals in China, a country with a population of over a billion. China's government run hacking efforts pale in comparison to the US and UK's effort though.
The NSA is not evil for what they do, and the United States is not the only nation doing it.
Yes, it is evil. It violates the US constitution, if nothing else. It subverts your democracy. The fact that other nations are doing similar stuff isn't a justification, it's still wrong and those other countries are wrong too. Having said that, the only one we know to be as bad if not slightly worse than the US is the UK. It's not the norm.
There is legitimate spying to increase security. Then there is watching everyone, all the time, because you are gripped by paranoid and corrupted by power.