There was a Television documentary thing repeated recently.
http://www.channel4.com/history/microsites/H/h istory/e-h/firstemperor.html
You may find it on channel 4's On demand service for download
http://www.channel4.com/4od/index.html
Apparently they knew that the body couldn't metabolise mercury directly - it's not so dangerous to humans in metalic form and was used as a purgative for many centuries in the west.
So they prescribed him mercury compounds which he could ingest - rather fatally. It affects the brain, Milliners use of hot mercury is where we get the expression mad as a hatter from.
There are many reasons mercury is seen as having magical powers, most notably the fact that it disolves gold, an otherwise immutable material. It's also incredible dense, if you have a big vat of it you can drop a connon ball in and it will bob about like a rubber ball in a bath.
There's a lot of Mercury ore in China so there would be no shortage of it and getting the liquid metal's not that hard you just have heat cinnebar ore and condense the vapours.
Mercury's old name "quick silver" comes from an old useage of quick meaning alive as in the "quick and the dead" in the King James Bible - it's really rather descriptive.