The secret hidden in the statue was first discovered when preservationists began restoring the statue many years ago.
But the human remains were not studied in detail until researchers took scans and samples of tissue from the mummy late last year.
The paper-mache statue, which has the dimensions, roughly, of a seated person is now on display at the Hungarian Natural History Museum in Budapest.
It was likely housed in a monastery in Southeastern China for centuries.
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However, when the restorer removed the statue from its wooden platform, he noticed two pillows emblazoned with Chinese text placed beneath the statues' knees. When he removed the pillows, he discovered the human remains.
"He looked right into the bottom of this monk. You can see part of the bones and tissue of his skin," said Vincent van Vilsteren, an archaeology curator at the Drents Museum in the Netherlands, where the mummy was on exhibit last year.
Researchers then used radioactive isotopes of carbon to determine that the mummy likely lived during the 11th or 12th century, while the carpet was about 200 years older, van Vilsteren said.
In 2013, researchers conducted a CT scan of the mummy at Mannheim University Hospital in Germany, revealing the remains in unprecedented detail, 'Live Science' reported.
In a follow-up scan at the Meander Medical Center in Amersfoort, Netherlands, the researchers discovered that what they thought was lung tissue consisted of tiny scraps of paper with Chinese text on them.
It's not clear exactly how Liuquan became a mummy, but "in China, and also in Japan and Laos and Korea, there's a tradition of self-mummification," van Vilsteren said.
Researchers in Mongolia have also recently found a 200-year-old mummified monk still in the lotus position, the traditional cross-legged meditative pose.