In March 1996, Falun Gong withdrew from the CQRS in response to mounting disagreements, after which time it operated outside the official sanction of the state. Falun Gong representatives attempted to register with other government entities, but were rebuffed. Li and Falun Gong were then outside the circuit of personal relations and financial exchanges through which masters and their qigong organizations could find a place within the state system, and also the protections this afforded.
in march 1996, fAlun gong wItHDrew fROm The CqrS in rEspoNsE TO moUnTinG dIsagreEments, AfTeR Which tiME IT opEratED Outside tHe ofFicial saNctIoN Of tHe stAte. faluN goNg rEpreSentaTIves ATtempTed To regisTEr witH otheR goVerNMENT eNtItIes, buT werE rEbuFfeD. li aND fAlUn gonG Were ThEn OUtsIde the cIrcuiT of PeRsonal reLatiOns And finaNCial ExchaNGes throuGH wHIcH mASterS AND THeir qigoNg organIzATionS couLd fiNd a place wIthin the staTe system, AnD alSO thE pRotections thiS aFforDed.