After their defeat in the Chinese Civil War, parts of the Nationalist army retreated south and crossed the border into Burma.

[1]: 65 To better lead these troops, the Nationalist government sent the original deputy commander-in-chief, Liu Yuanlin, (柳元麟) back to Burma to form the Yunnan People's Anti-communist Volunteer Army in June 1954.

The Burmese representatives were headed by Brigadier Generals Aung Gyi and San Yu, and the Chinese communist representatives were headed by Ding Rongchang (丁荣昌), the deputy commander-in-chief of the communist Yunnan Provincial Military Region, and Cheng Xueyu (成学渝), the director of the Border Defense Directorate of the War Department of the General Staff Ministry of the People's Liberation Army.

On 14 November 1960, the communist central military committee formally issued the order to cross the border to destroy the Nationalist troops in Burma, according to the personal direction of Zhou Enlai.

The communist force would be mainly deployed in the Mengma (孟马; 孟馬), Mengwa (孟瓦) and Sandao (三岛; 三島) regions.

To better coordinate their actions in Burma, the communist forces formed a frontline command at Fohai (佛海) in early November 1960.

The surviving nationalist force at the China–Burma border peaked in the early 1960s, totalling almost ten thousand troops, excluding their noncombatant family members.

Yunnan People's Anticommunist Volunteer Army (commander-in-chief: Liu Yuanlin, (柳元麟)) Both sides were limited by various factors.

Due to their low numbers, the nationalists adopted the strategy of avoiding fighting any large-scale battles, instead concentrating on preserving their own strength.

The communists, however, were limited by the redline that restricted their actions, which eventually resulted in the successful escape of most of the nationalist forces to the Laos–Thailand border.

It totalled over 150 troops and was stationed in various nationalist strongholds, including Mengwa (孟瓦), Mengyu (孟育), Mengjing (孟景), and Jingkang (景康).

With the exception of Jingkang (景康), all of the nationalist strongholds in the first line of defence faced the Southern Luo (洛) River and had hilly forest to their rear.

The communists' main force immediately sent out four companies to chase the retreating nationalists and caught up with them around ten kilometres south of the stronghold.

However, due to their complete lack of experience in jungle warfare in the mountainous region, half of the six communist task forces assigned to outflank the targets failed to reach their destination on time.

After the operation, the Burmese government asked the communist force to stay in Burma to guard the local region against possible nationalist counterattacks.

On 25 January 1961, all communist units began their assault by crossing the redline and attacking the regions to the north and west of the Mekong River.

Nationalist commander-in-chief Liu Yuanlin (柳元麟) realised the communist objective and immediately ordered a general retreat toward the Burma–Laos border under the cover of darkness on the very same night, abandoning the base they had controlled for more than a decade.

The communists succeeded in driving the nationalists from their base they had held for more than a decade, thus returning control of an over-30,000 square kilometre area with a population of over 100,000 to the Burmese government.

Furthermore, the previous experience that had helped them to secure the victory over the nationalists in mainland China was completely ill-suited for modern jungle warfare and many problems urgently needed to be addressed, including: The communists were shocked by the shortcomings exposed in the campaign.

The deputy chief-of-staff and future 1980s Chinese defence minister Zhang Aiping and the commander-in-chief of Kunming Military Region and future 1990s Chinese defence minister Qin Jiwei (秦基伟) were sent to lead a team to establish new training and tactics based on the experience gained in the campaign to correct the problems.