After the establishment of the PRC in 1949, Liao became deputy secretary of the New Democratic Youth League and president of the All-China Federation of Democratic Youth, both of which were founded by Liao himself and were devoted to promoting youth works and recruiting young party members. He was made vice chairman of the Overseas Chinese Affairs Commission, assuming the chairmanship in 1959. He was also responsible for establishing and leading a number of mass organizations, such as the Sino-Soviet Friendship Association, the Chinese People's Institute of Foreign Affairs, and the China Peace Committee, all of which came into existence in late 1949 to cultivate the Chinese communist cause and image at home and abroad. One of his primary tasks was to promote the PRC's ties with Japan, which resulted in the establishment of the China-Japan Friendship Association in 1963.
In 1967 Liao was purged from office during the Cultural Revolution. In 1972 he returned to the public scene as advisor to the Foreign Ministry, continuing his previous works of fostering PRC ties with Japan and the overseas Chinese. Liao died on 10 June 1983 in Beijing.
Ito, Go. Alliance in Anxiety: Détente and the Sino-American-Japanese Triangle. New York: Routledge, 2003.