He was then made Chairman of the Government of Sichuan Province from 1929, but his relationship with Chiang Kai-Shek was unstable as was the province he governed. Sichuan was in the hands of Liu Wenhui and four other warlords: , , Deng Xihou, and Tian Songyao. No one warlord had enough power to take on all the others at once, so many small battles occurred, pitting one warlord against another. Large conflicts seldom developed, plotting and skirmishing characterized the Sichuanese political scene, and ephemeral coalitions and counter coalitions emerged and vanished with equal rapidity.
In May 1930 his province was invaded by the army of Tibet. With the province locked in internal struggles, no reinforcements were sent to support the Sichuan troops stationed in Xikang. As a result, the Tibetan army captured, without encountering much resistance, Garze and Xinlong . When a negotiated ceasefire failed, Tibet expanded the war attempting to capture parts of southern Qinghai province. In March 1932 their force invaded Qinghai but was defeated by the Qinghai warlord Ma Bufang in July, routing the Tibetan army and driving it back to Xikang. The Qinghai army captured counties that had fallen into the hands of the Tibetan army since 1919. The victory on the part of the Qinghai army threatened the supply lines to the Tibetan forces in Garze and Xinlong. As a result, this part of the Tibetan army was forced to withdraw. In 1932 Liu Wenhui in cooperation with the Qinghai army, sent out a brigade, to attack the Tibetan troops in Garze and Xinlong, eventually occupying them, Dege and other counties east of the Jinshajiang River.
In 1932 Liu Wenhui drove the Tibetans back to the Yangtze River and even threatened to attack Chamdo. At Batang Town, Kesang Tsering, a half-Tibetan, claiming to be acting on behalf of Chiang Kai-shek, managed to evict Liu Wen-hui's governor from the town with the support of some local tribes. A powerful "freebooter Lama" from the region gained support from the Tibetan forces and occupied Batang, but later had to withdraw. By August 1932 the Tibetan government had lost so much territory the Dalai Lama telegraphed the Government of India asking for diplomatic assistance. The Sichuan and Tibetan armies confronted each other across the Jinsha River until the Xikang-Tibet Gangto Ceasefire Agreement was made in June 15, 1933. By early 1934 a ceasefire and armistices had been arranged with both Liu Wen-hui and Governor Ma of Chinghai in which the Tibetans gave up all territory to the east of the Yangtze but kept control of the Yaklo district which had previously been a Chinese enclave to the west of the river.
Finally Liu Wenhui was ousted from Chengdu by a rival warlord, his nephew, Liu Xiang in 1935, when Liu Xiang sided with smaller warlords against Liu Wenhui. A family-brokered peace was arranged which mollified Liu Wenhui with control of the familiar neighbouring Xikang province, a sparsely populated but opium-rich territory on the periphery of Han China. Liu set up headquarters in the city of Ya'an and set about the highest priorities of a warlord: self-preservation and self-enrichment. Self-enrichment was relatively secure through the illicit but uncontrollable opium trade; survival entailed maintaining troops but using them as little as possible. In this, the territory of Xikang province was advantageous to Liu Wenhui, since its marginal position effectively insulated him from rival warlords, and from military engagements ordered by the central government.
During the GMD pursuit of the communist forces during the Long March, this conflict between the two leaders came to a head. Chiang repeatedly ordered Liu to bring his troops against the fleeing communists, but Liu made excuses, while secretly allowing safe passage for the Red Army in a non-aggression pact consistent with the first priority of a warlord: preserving one's troops and one's power. Thus the engagements around Xiakou in 1934 did not involve Liu Wenhui's 24th Route Army, but the 21st army of GMD troops garrisoned just across the Sichuan border in Mingshan.
From 1939 as Governor of Xikang Province Liu Wenhui tried to establish the infrastructure needed to support the remote province. Its transport was primitive and it had no industry to speak of. Large projects such as the hydroelectric plant built in 1944 promised to bring the area into the modern world. Liu Wenhui also promoted education as a way to improve Xikang’s situation.
Liu walked the tightrope of allegiance throughout the 1940's. He made sure that his forces saw as little action as possible, while at the same time he was careful not to arouse the full wrath of Chiang Kai-shek, and thereby continued to reap the benefits of wearing the Nationalist mantle.
As Governor of Xikang Province Liu switched sides from his half-hearted alignment with the Kuomingtang to siding with the Communists in 1949. He was rewarded with a bureaucratic post in the new communist government in Beijing. For the rest of his life, the former warlord served in various capacities in the Communist party, including as the minister of Forestry Ministry. Although Xikang ceased to exist in 1956 as part of the land reform, Liu Wenhui’s measures gave the area a solid basis for development. The hydroelectric plant he constructed in 1944 is still in operation. Kangding, once the provincial capital, is now a thriving town. In his last days, against governmental ban and relatives' objection, Liu Wenhui convinced his relatives to go to Tiananmen Square to pay his respect to Zhou Enlai when the Chinese premier passed away.
*1926 General Officer Commanding 24th Division
*1927 - 1929 General Officer Commanding Sichuan-Xigang Defence Force
*1929 - 1935 Chairman of the Government of Sichuan Province
*1935 - 1949 General Officer Commanding 24th Army
*1938 Director of the Generalissimo's Headquarters Chungking
*1939 - 1950 Governor of Xikang Province
*1944 - 1945 General Officer Commanding 22nd Corps