From 1981 to 1984 he was director of the No. 1425 Research Institute of the Fourth Ministry of Machine Building.[2] In 1984, he was appointed vice-minister of the Ministry of Electronics Industry and became associated with Li Peng, then a vice-premier whose portfolio included the electronics industry.[4]
Governor of Hainan
In the aftermath of the Tiananmen Square protests of 1989, the top leaders of Hainan Province, Xu Shijie and Liang Xiang, were dismissed because Liang was an ally of the reformist national leader Zhao Ziyang and Xu supported Liang's policies.[5] Liu was selected to replace Governor Liang Xiang on the recommendation of Premier Li Peng. He was formally appointed governor on 14 September 1989, but effectively took over the position before that. In a meeting of provincial party leaders on 4 September, he emphasized that provincial cadres should implement the policy of the central government "to the letter".[4]
However, Liu was unable to work together with the Chinese Communist Party Committee Secretary of Hainan, Deng Hongxun, who was associated with the central leaders Jiang Zemin and Qiao Shi.[4] From 1990 to 1992, the two top officials of Hainan clashed fiercely, hindering the young province's development.[4] By the end of 1992, Deng and Liu were trying to drive each other out of the province.[4] A high-ranking official, Li Shanyou, accused Liu of visiting a prostitute.[4] Li was imprisoned after the accusation was proven false, and Liu launched a counter-investigation to find the instigator, rumoured to be Deng. Their infighting became an embarrassment to the central government, which transferred both of them to Beijing in January 1993, and replaced them with a single official, Ruan Chongwu.[4]