Crossword Genius

Chinese agent engaged in Washington diversion (7)

Ross

I believe the answer is:

hangman

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'engaged in washington diversion' is the definition.
Although both the answer and definition are singular nouns, I can't understand how they can define each other.

'chinese agent' is the wordplay.
'chinese' becomes 'han' (Chinese dynasty).
'agent' becomes 'g man' (G-man is an example).
'han'+'gman'='HANGMAN'

Can you help me to learn more?

(Other definitions for hangman that I've seen before include "Pencil-and-paper game for two" , "Killer" , "official suspending offenders" , "Official executioner" , "He suspends" .)

I've seen this clue in The Times.
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