Larry, I don't think that was ever specified. There are all sorts of problems with the China situation. The U.S. could still spin it by saying China is lying and that they forced Burn to confess; since China officially admitted to having Burn, their position is very weak. They kidnapped him, assaulted two other CTU agents, and the consul was killed by the Chinese guards, not the masked men. They can't hide Burn at this point, because the U.S. government knows the Chinese have him. After the U.S. reveals that a nuclear missile was shot down over Los Angeles, China's position weakens even further... if the raid on the consulate hadn't taken place, the consulate, along with a large portion of Los Angeles, would have just been destroyed.
"Why didn't CTU deny everything and make counter-accusations?" Because FOX isn't that smart. In the long run, I don't think it would have mattered if they diverted suspicion to Marwan's group. The Chinese would have gone after CTU/Jack/Burn anyway.
FOX has allegedly renewed 24 for two more seasons. And according to rumor, this next season (5) is going to be connected to and taking place fairly soon after the events in season 4, not the usual 1.5-2 years between seasons.