The U.S. Navy has revealed that the June 11 incident, where, the American destroyer USS John McCain, while training off Subic Bay in the Philippines, was actually tracking a Chinese submarine as it ran into the destroyer's towed sonar array. The Chinese admitted the sub was one of theirs, and the boat was apparently following the American ship unaware that a sonar array (which usually operates over a hundred meters beneath the surface, and two kilometers behind the ship towing it) was in the way. The Chinese have not revealed which submarine, or even which class, was involved in the collision. There is probably not much damage to sub, since it fled the scene without surfacing. The array was damaged, but not in a way that indicated serious damage to the sub.
The Chinese sub was probably a diesel-electric sub, which is a lot quieter under water than one of their nuclear powered models. The incident brings up memories of similar incidents with Russian subs during the Cold War. Some of these collisions were believed to be intelligence operations, an effort to grab portions of the American sonar array for examination (and reverse engineering.)
U.S. anti-submarine forces (subs, aircraft and surface ships) are increasingly playing tag with Chinese subs, which was what the McCaine was doing when the collision took place. As was done with Russian subs during the Cold War, the American sailors want to hone their skills at finding Chinese subs. All this effort is kept quite secret, as any information about American successes or failures, can be useful to the Chinese.