Initially a labor organizer; he went on to serve in the Communist Party of China political and military leadership during the civil war between the Nationalists (Guomindang or Kuomintang) and the Communists. He held high office during the CCP's Jiangxi Soviet period (1931-1934).

In October 1934; at the beginning of the Long March; Xiang stayed behind to fight a rearguard action that would allow the marchers to get out of the ring of surrounding Nationalist forces. The marchers; with Mao Zedong as their leader; went on to Yan'an; while Xiang remained in the Jiangxi region; coordinating guerrilla operations to harass Nationalist forces.

When the Japanese invaded in July 1937; a united front (the Second United Front) was declared between Nationalists and Communists; and Xiang's guerrillas became the nucleus of a legitimate fighting force: the New Fourth Army. This army operated behind Japanese lines; and was subject to orders coming from both the Communist leadership in Yan'an; and the Nationalist leadership; which had moved inland from Nanjing to Chongqing.

Contradictory orders from these groups led to confusion; and eventually the New Fourth Army Incident; in which Xiang was killed in an assault on the army by the Nationalist forces. He was killed by a member of his own staff; Liu Houzong; for the gold resources of the New Fourth Army. Pictures From History