In December 1937, as the Second Sino-Japanese War intensified, he was sent to Hong Kong, where he ran the Eighth Route Army's office. Among other matters, he was responsible for arms purchases for the CPC's Southern Bureau. His work there formed the foundation of what would become the CPC's united front strategy in the territory, aimed at using Hong Kong's economic resources and connections to overseas Chinese communities to fund CPC aims; indeed, while in Hong Kong, Liao cultivated relations and alliances with the territory's "big capitalists". His mother arranged for Jing Puchun to be sent there as well, as a surprise for her son; the two had a joyous reunion at the docks as Liao stepped off his ship, and married soon after, on 11 January 1938. Liao left Hong Kong in January 1941, but after the Imperial Japanese Army invaded and occupied the city, he was chosen for his fluency in Japanese along with Lian Guan to sneak back in and establish contact with fellow revolutionaries who had been trapped there; by May, he had helped over 500 people escape from Hong Kong, including his mother, Soong Ching-ling, Mao Dun, Xia Yan, Liang Shuming, Cai Chusheng, Liu Yazi, Hu Feng, Hu Sheng, and Zou Taofen ().