China admits existence of a cyber-warfare team called “Blue Army”

"Blue army" is just a generic term used for "the other side" in military exercises, as opposed to "red army" for "our side". E.g. see this story from 2006 about blue versus red drills: http://www.china.org.cn/english/China/181264.htm

More informative articles in Chinese:

http://news.xinhuanet.com/mil/2011-05/26/c_121459780.htm

http://news.sohu.com/20110529/n308821878.shtml

The group referred to in the article as the "blue army" is according to these other articles a "network blue army", it's not entirely clear that this is anything more than a training program. There is not much evidence beyond the circumstantial that this will "confirm suspicions that cyber attacks on their systems do indeed originate from China" as the article says.