On January 8, 1946, Liu Handong (刘瀚东), the commander of the Nationalist 107th Division, arrived at Siping with over a hundred associates to discuss the city's transfer from the Soviet Red Army to the Chinese administration.

The Nationalists had neither sufficient troops nor enough transportation assets to effectively assume control of the previously Japanese-occupied region of China, and they could not spare enough forces to hold the city long enough for reinforcements to arrive.

The Nationalists at Siping recruited bandits in the region, including members from the Good Under the Heaven (天下好) and Flying Over the Grass (草上飞) gangs, to secure the local garrison.

The failed attempt by the Nationalists provided an excellent excuse for the Communists to counterattack, and, in a short period of several days, the Nationalist strongholds at Crouching Tiger Village (Wo Hu Tun, 卧虎屯), Maolin (茂林), Baokang (保康), and Twin Mountains (Shuang Shan, 双山) fell into Communist hands.

The Communists had also captured 69 machine guns, 32 artillery pieces, over two thousand firearms, nearly two dozen automobiles, over 300 military horses and large amount of supplies from the Nationalist defenders.

Chiang's plan collapsed when melting snow turned the roads to mud, bogging down the highly mechanized Nationalist force, making it unable to reach Siping.

The Nationalists would also suffer another defeat in the Jinjiatun Campaign due to the harsh terrain which was hostile to the highly mechanized force.