The day after Lin Biao's death, Li Zhengjun and Xu Peigen were at Mount Zijinshan Observatory, Nanjing, to discuss construction of a special astronaut-training machine. Immediately thereafter, Unit 714 came under special scrutiny. '714' was a homonym for 'armed revolt'. The investigators concluded that it must be connected to the plotters in some way. Even though equipped with only one telephone, the security special case team decided that Unit 714 was the headquarters for the alleged coup d'etat. In retrospect it is obvious that the office could not have been connected with the alleged plot, since Mao Zedong and Zhou Enlai had signed the order to establish the office, but not Lin Biao. Such considerations did not deter the investigators and the leaders of the unit were detained for sustained interrogation.
Nevertheless the project was not cancelled and those that remained continued their work. The astronauts reported for training by November 1971. The immediate problem was that the budget was not in hand to fulfil the training plans. Major General Yang Guoyu and State Planning Committee Director Yu Qiuli were in charge of the material supply for the project. The spacecraft mock-up, housed in a large hall, was built of wood and cardboard. Astronaut food in toothpaste tubes was being produced, while the astronauts were supposed to undergo their strenuous training regime living only on steamed bread.
Qian Xuesen himself was unwilling to bring up the issue of provision of necessary funds with Zhou Enlai. Finally Yu Qiuli attended a meeting where Mao himself was presented with the need for additional funds. Mao reacted by blaming the project staff for inadequate moral resolve and declared that the nation must take care of terrestrial needs first. Space could come later. Faced with no budget, and pilots that had not been able to fly for months, the astronauts were released to return to their units. On May 13, 1972, the final staff member of Office 714 returned to his unit and China's first manned space project was officially wound up.
Apparently the initial design for a Chinese manned spacecraft would basically be a clone of the American Gemini system.
Sometimes it really helps when the enemy is being stupid.