Despite China saying it has addressed the issue of forced confessions through a series of reforms, prosecutors and judges "ignore clear evidence of mistreatment" while police are covering up abuse, the report from Human Rights Watch (HRW) said.
The New York-based campaign group said police manipulate video interrogations so that confessions are made on camera, while torture -- using methods that leave no visible injuries -- takes place out of sight.
The use of ruthless "cell bosses" -- fellow detainees who oversee detention centres for the police -- was also widespread, the report said.
"We heard appalling stories of detainees being hung by the wrists, shackled for years, and terrorised by cell bosses, yet having no real means to hold their tormentors to account," Sophie Richardson, HRW's China Director, said in the report.
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"Police continue to be expected to produce confessions in order to secure a conviction," Richardson added at a press conference in Hong Kong today.
The group analysed hundreds of newly published court verdicts, and interviewed 48 recent detainees, family members, lawyers, and former officials.
Of the 432 verdicts that made reference to torture allegations, only 23 resulted in the court throwing out evidence, and there were no acquittals, the report said.
HRW found only one successful torture prosecution concerning three police officers, but none served prison time. It also found evidence that health workers and lawyers were unwilling to assist torture victims with their complaints.
After a series of high-profile police brutality cases in 2009 and 2010, China vowed to crack down on abuses and revised its Criminal Procedure Law.
The ruling Communist Party claims to have made the "rule of law with Chinese characteristics" one of its top priorities.