In 1928, they fell in with Chen Gongbo and Ku Meng-yu to form the Reorganization Clique (zh: 国民党改組同志会, 改組派), one of many Kuomintang factions.

Later in the year with the Mukden Incident, Chiang began consolidating the party factions and in December, Ku was elected to the Central Executive Committee of the Kuomintang.

In December 1934, Ku was appointed as the Permanent Secretary of the Ministry of Industry and in 1935, he secured a promotion to serve as Vice Minister of the Kuomintang Central Executive Committee.

In June 1938, he served as interim secretary for the Society of the Three People's Principles Youth League and was also made the group's Central Executive Officer.

Together with Fang, Ku set up the Free China Relief Agency, and the Sino-Laotian Friendship Society and the ROC branch of the Asian People's Anti Communist League.