I think they probably are;
This says it rather well;(there are a couple of links to other sites as well)
http://www.tibet-society.org.uk/pcurrent.html
Finally, and most worryingly, if the Chinese already have a puppet Panchen Lama installed they can use this fact to select their own Dalai Lama who they can then attempt to turn into a puppet. In this nightmare scenario the struggle for a Free Tibet would essentially be lost. It is no doubt that it is this long political game that the Chinese Government are currently working towards.
On the 14th May 1995, His Holiness The Dalai Lama proclaimed the discovery of the Eleventh Panchen Lama. The new Panchen Lama who was living in Tibet with his parents, however, was quickly condemned by the Chinese authorities and then abducted by the Chinese authorities becoming the worlds youngest political prisoner.
Meanwhile, the Chinese authorities had by now proclaimed their own Panchen Lama, a six year old boy called Gyaltsen Norbu, and had their own installation ceremony on November 30, 1995 with the actual 'enthronement' taking place on December 8th.
The whereabouts of the abducted Panchen Lama were not known until June 1996 when after a year of denying any knowledge of his location the Chinese finally admitted that they were indeed holding him. The reasons given by the Chinese for holding Gedhun Choekyi Nyima was to prevent him from being kidnapped by Tibetan nationalists!
As of January 1997 there have been no further developments and the Panchen Lama is still held by the Chinese.
The admission by the Chinese that they are holding the Panchen Lama at least brings an end to the conjecture of whether or not he is still alive but it does nothing to quieten concerns about his safety. Nor have the Chinese stated when they will release the Panchen Lama.
Regarding the Chinese designated 'Panchen Lama', the Chinese have been using the boy as an icon including unveiling a portrait of him in February this year and plans have been announced by the Chinese to have pictures of him hung throughout Tibet. This is in stark contrast with last years campaign by the Chinese to ban the public display of pictures of the Dalai Lama in Tibet.
The situation is set, therefore, for a continuation of the dispute. The Chinese will no doubt continue holding the Panchen Lama whilst attempting to prove to the world that their choice is the true Panchen Lama and who can then be used as a political weapon against His Holiness The Dalai Lama and the Tibetan people in their peaceful and just struggle for an independent Tibet.