Chen was born in Wuxi, Jiangsu. He graduated from Pomona College, earning Phi Beta Kappa with a BA in History in 1920. He then pursued an MA in History at The University of Chicago. In spring 1922, he enrolled at Harvard University where he obtained a PhD in history. During his time there, he assisted Charles Homer Haskins, a specialist in Medieval Europe. A year later, he left the United States for Germany, and completed his doctorate in history at Berlin University. In 1924, he returned to China and became one of the youngest professors at Peking University. Later he joined the Academia Sinica, working at the Institute of Social Science Research.
