During the Sino-Japanese War, Li fought with communist forces in central China, earning him command of the Central China Military Region in 1944. During the Chinese Civil War, he served first as deputy commander of the Central Plains People's Liberation Army and then in May 1949 as chairman of the provisional government of Hubei and political commissar of the Hubei Military District.
After the PRC's birth in October 1949, Li was assigned to serve in Hubei, becoming mayor of Wuhan in 1952. In mid-1954 he was transferred to Beijing when he became the vice premier. In mid-1957 he was also appointed minister of finance, in which capacity he reformed the Chinese economy along Soviet lines, resulting in the disastrous failure of the Great Leap Forward in late 1959. As vice premier, he led a number of delegations abroad to nurture PRC ties with other socialist and third world nations. Despite several political purges, including the ultraleftist Cultural Revolution (1966–1976), he retained his government positions. After the revolution ended, he took up more positions, first as vice chairman of the CCP Central Committee in 1977 and then vice chairman of the state financial and economic commission in 1979.
In 1983 Li succeeded Deng Xiaoping as president of the PRC, a post he held until 1988. During this time he devoted much attention to advancing his nation's international status. He retreated from public life in 1988 and retained only the chairmanship of the People's Political Consultative Conference, in which capacity he supported Deng's order to crack down on student demonstrators in Tiananmen Square on 4 June 1989. Li died on 21 June 1991 in Beijing.
MacFarquhar, Roderick, ed. The Politics of China: The Eras of Mao and Deng. New York: Cambridge University Press, 1997.