The case captured the nation's attention due to a 500,000 yuan ($106,000) reward offered by the family for any information on the child's whereabouts.
A poster released by the family, which included a photo of the boy and a description of his clothing, said he was last seen near his school, Beijing Youth Daily reported on Wednesday.
The police statement said the case had been declared a top priority, with officers in Yueqing and the nearby city of Wenzhou dedicating huge resources and manpower to searching for the boy.
At the same time, an online topic, "Wenzhou 11-year-old boy missing for five days", was read more than 230 million times on Weibo, China's Twitter.
Throughout the search, the boy was hiding in a nearby village while Chen was faking her cooperation with police and her efforts to find her son, the police statement said.
Police said her behaviour had seriously disrupted social order, wasted a large amount of public resources and damaged public trust.
On Tuesday, while the boy was still believed to be missing, Zhejiang News quoted his father saying: "We have searched all over Yueqing, but still no news of my son, it's like he's disappeared into thin air."
Just one day later, with the boy found safe and well, Zhejiang News reported a neighbour had said the whole family had moved out at around 3am on Wednesday and their whereabouts were unknown.
The family's property agent claimed they owed 7000 yuan ($1480) in annual rent on their house since they "had a tight budget", the newspaper also reported.
China's online community reacted furiously to the news on Weibo, with many commenters criticising the family for wasting police resources and duping concerned members of the public.
"Everyone is happy that the child is safe, but this kind of family member must be seriously dealt with! This not only wastes everyone's time and energy, it is emotionally exhausting and wastes national resources. This is over the top!" read one comment which was liked more than 7000 times.
Children regularly go missing in China, where an estimated 70,000 are kidnapped and sold on the black market every year. Very few ever make it back to their parents.
The crime re-emerged with the introduction of the one-child policy in the 1980s, with many families preferring a male heir due to traditional beliefs. Some families were also driven to sell their children because of extreme poverty and an inability to pay fines for giving birth to additional children.
Police said they were carrying out the next stages of an investigation, and that the case would be dealt with in accordance with the law.
- South China Morning Post