His familial ties and skills as a financial administrator helped him navigate the tumultuous court politics of the late 740s and early 750s to become the emperor's leading chancellor in 752.
While Yang enjoyed Emperor Xuanzong's trust, his competence as chancellor was questioned and he became entangled in a fierce rivalry with an erstwhile political ally, the general and imperial favorite An Lushan.
For his military service, he was set to be promoted, but the secretary general of Yi Prefecture, Zhang Kuan (張寬), disliking him, initially refused to do so and in fact whipped him, but eventually he was made the magistrate of Xindu County.
After his three-year term of service was over, he did not save sufficient funds to return home, and relied on assistance from a rich man of the region, Xianyu Zhongtong (鮮于仲通).
Yang Zhao later served as the sheriff of Fufeng County (扶風, in modern Xi'an, Shaanxi), but was unable to progress further, and returned to the Yi Prefecture region.
Yang Zhao was therefore able to use this opportunity to destroy several hundreds of households, although, with the eunuch Gao Lishi and Emperor Xuanzong's son-in-law Zhang Ji (張垍) protecting him, Li Heng was not implicated.
As of 748, Yang Zhao carried some fifteen office titles, the chief among which were imperial censor and director of accounting in the ministry of treasury (度支郎中, Duzhi Langzhong).
Emperor Xuanzong, with Yang reporting record surpluses, took a tour of the imperial treasury with the officials and awarded him with a purple robe and a golden fish.
Also, because there were references in prophecies to a "golden sword" (金刀, which, when put together, made Zhao 釗)), he requested a name change as well.
Meanwhile, Emperor Xuanzong made Yang Guozhong You Xiang (右相) -- the head of the legislative bureau of government (中書省, Zhongshu Sheng) and a post considered one for a chancellor; he also made Yang the minister of civil service affairs (文部尚書, Wenbu Shangshu), and further allowed him to keep his command of Jiannan.
It was further said that he tried to show off his talent by having important matters decided at his home without discussion with other officials, and then simply announce his decisions once he arrived at the government halls.
Yang, instead, entered into an alliance with Geshu, who also disliked An and who was then the military governor of Longyou Circuit (隴右, headquartered in modern Haidong Prefecture, Qinghai) at that time, by recommending that Geshu take over the command of Hexi Circuit (河西, headquartered in modern Wuwei, Gansu).
At this time, Yang and his relatives were living in extreme luxury, and he and the Lady of Guo had connected mansions and were openly displaying their closeness.
Thereafter, Emperor Xuanzong would no longer believe any suggestions that An was plotting rebellion, despite Li Heng agreeing with Yang's assessment on this issue.
Yang and Wei then suggested that An be promoted to be chancellor, and that his three commands be divided between his three deputies; Emperor Xuanzong initially agreed, but after the edict was drafted, Emperor Xuanzong tabled it and instead sent the eunuch Fu Qiulin (輔璆琳) to send fresh fruits to An and to observe him—upon which An bribed Fu into submitting a favorable report.
Subsequent events—including An's refusal to attend the funeral of an imperial prince in summer 755 and his offer to send a large number of horses to Chang'an in fall 755, began to cause Emperor Xuanzong to start suspecting An.
When Geshu subsequently took defensive position at Tong Pass and refused to engage An's forces, reasoning that as long as he kept Chang'an secure, the other generals Li Guangbi and Guo Ziyi would soon be able to capture An's power base at Fanyang and render An harmless.
On July 14,[8] the imperial train, without announcing to the people of Chang'an, left Chang'an, with Emperor Xuanzong attended to by the imperial clan members, Yang, Wei Jiansu, the official Wei Fangjin (魏方進), the general Chen Xuanli (陳玄禮), and eunuchs and ladies in waiting close to the emperor.
Meanwhile, though, emissaries of the Tibetan Empire, who had followed Emperor Xuanzong south, were meeting with Yang Guozhong and complaining that they were also not fed.
He therefore had Gao take Consort Yang to a Buddhist shrine and allow her a forced suicide, considered a more dignified death than outright execution.
Yang's biography in the Old Book of Tang commented, with regard to Yang's misjudgment of the situation at Tong Pass: At that time, while An Lushan controlled the Yellow River and Luoyang, his soldiers were only able to reach as far east as the Liang and Song region to the east [(i.e., modern eastern Henan)] and the Xu and Deng region to the south [(i.e., modern southeastern Henan)].
Li Guangbi and Guo Ziyi were leading the best soldiers from north of the Yellow River and had just captured the Heng and Ding region [(i.e., modern central Hebei).
If the Yao Mountains [(in modern Sanmenxia, Henan)] and the Hangu Pass could be held and the army not be frivolously used, then the violent rebellion will surely begin to crumble by itself.