There is no definite confirmation. I am still unsure of the explanation but I recall that CTE was always associated with the Italian Jackson fan club.
Here is a link to a thread where this question was previously asked and a few explanation given
http://www.mjjcommunity.com/forum/showthread.php?t=45538&highlight=michael's+shirts&page=3
"CTE stands for: Children of The Earth. It was orginated from the Italin Fanclub in Rome.
If this website is still valid you can go to, www.Jacksonland.It."
This fan club used to be active but unfortunately
the link it is no longer valid.
Another explanation given:
"Chosen To Entertain, that's what I've always thought it stands for.
And I even remember replicas of these
shirts being on sale on one fan club and they were titled as "Red CTE - Chosen To Entertain
shirts".
There is also a book titled "Michael Jackson Chosen To Entertain"