Yuan was born into a Hakka family in Maoping Township, Jinggangshan City, Jiangxi, at the foothills of the Luoxian Mountains, in October, 1898.
In 1923, Xie Guannan had Yuan Wencai's home ransacked, house burned down, his elder brother imprisoned, his wife raped and then enslaved, while his mother murdered execution style.
The young Yuan Wencai, then in his early twenties, fled into the mountains and joined a group of brigands calling themselves the "Horse and Sword Brigade" (馬刀隊) headed by Hu Yachun (胡亚春).
They operated in the hills of Jinggangshan, particularly around Ningang county, and had close ties with the "Green Forest" (绿林) bandits based on higher terrain, led by Wang Zuo.
Both Yuan and Wang adopted new strategies when they resumed their banditry activities for survival in that they had only targeted the richest landlords and merchants who were mostly hated by the general population.
On September 30, 1927, Mao Zedong arrived at Sanwan (三湾) village of Yongxin (永新) county, just north of Jinggangshan, with the remnants from the abortive Autumn Harvest Uprising, and sent letters to both Yuan Wencai and Wang Zuo to ask their help to establish a communist base locally.
They participated in a successful attack at Xincheng on a battalion of the Kuomintang's Jiangxi Army, killing the enemy commander and taking more than a hundred prisoners.
After Zhu De's soldiers joined the Jinggangshan base, they were merged with the existing forces to become the Fourth "Red Army".
In January 1929, the bulk of the Red Army left Jinggangshan to establish a new base at Ruijin, leaving around 800 ex-Kuomintang troops under Peng Dehuai.
The Kuomintang's repeated mop up operations against them proved to be futile because the communist forces only confiscated property from wealthy landlords, and distributing to peasants.
Xiang Zhongfa and Li Lisan succeeded in rising to power under the direction and support of the Comintern and their extreme leftist policy inevitably effected all communist bases in China, including Jinggangshan.
The new strategy was obvious unfit for China at the time, and many commanders such as Peng Dehuai, Zhu De and Chen Yi voiced their opposition, Wang Zuo and Yuan Wencai included, but it was useless because the new leadership refused to change its policy.
Mao Zedong strongly opposed the military adventurism of Xiang Zhongfa and Li Lisan, but lost and was temporarily forced out of the communist leadership and sent to southern Jiangxi.
This resolution had provided excellent ammo for Li Lisan and Xiang Zhongfa in their power struggle against Mao, and people like Yuan Wencai and Wang Zuo were obviously targets.
In contrast to the professional soldier Peng Dehuai who faithfully attempted to carry out the impossible missions by dutifully obeying the orders despite his personal opposition, which of course ended in obvious defeats, Wang Zuo and Yuan Wencai not only voiced their opposition in words, but also carried it out in action by simply refusing to obey the unrealistic orders from the new communist party leadership and continued to practice Mao Zedong's strategy.
With their primary supporter and protector Mao Zedong falling out from power, Wang Zuo's and Yuan Wencai's days were numbered.
The three lieutenants of Xiang Zhongfa and Li Lisan then changed their story, claiming that the intelligence indeed appeared to be a rumor, and that they needed to arrange a meeting with the two commanders to clear things up, and that some forces should be deployed just in case.
After leaving Peng Dehuai's camp, the three immediately faked Mao Zedong's order to lure both Wang Zuo and Yuan Wencai to the supposed meeting to discuss the military situation.
When Zhu De visited Jinggangshan in 1962 and Mao Zedong in 1965, both called upon Yuan Wencai's elderly widow Xie Meixiang (謝梅香).