Liu dominated the race from the start, finishing in 13.07 seconds to the delight of the home crowd. Oliver was second in 13.18, while American Aries Merritt was third in 13.24.
Jamaican sprinter Asafa Powell cruised to victory in the men's 100 meters, finishing in 9.95 seconds. American Michael Rodgers was second in 10.01, while Jamaica's Mario Forsythe was third in 10.12.
Oliver hadn't lost an outdoor 110-meter hurdles race since Aug. 2009 and was coming off a win Thursday in Daegu, South Korea.
Liu has struggled with injuries since his dramatic, last-second withdrawal at the 2008 Beijing Olympics and was experimenting with a new start technique in Shanghai, taking seven steps to the first hurdle instead of his customary eight.
Powell's health had been in question entering the race after he slightly injured his hamstring in a 200-meter race at the Jamaica International Invitational in Kingston last weekend, limping home in last place.
He said before the Shanghai meet, however, that the injury wasn't serious and he didn't believe it would affect him in the race.
The field was diluted somewhat by the absence of world-record holder Usain Bolt of Jamaica, who decided not to race in Shanghai this year after winning the 200 meters here last year, and American Tyson Gay, who was running in a 150-meter race in Manchester, England, on Sunday instead.
Powell said he plans to compete against both men in separate races this summer to prepare for the World Championships in South Korea, in August.
Jamaica's Veronica Campbell-Brown, meanwhile, beat American rival Carmelita Jeter to capture the women's 100 meters on her 29th birthday.
Campbell-Brown benefited from a fast start and held off a quickly closing Jeter in the final meters to win in a time of 10.92 seconds. Jeter was second in 10.95 and Nigeria's Blessing Okagbare third in 11.23.
Jeter has been dominant in the 100 this season, setting the fastest time of the year -10.86 - in Jamaica last weekend and then winning again on Thursday in Daegu.
Campbell-Brown was running in her first 100-meter race of the year. The two-time Olympic gold medalist in the 200 meters is planning to compete in both the 100 and 200 at the worlds.
Dwight Phillips of the United States, the 33-year-old three-time world champion in the long jump, finished in a disappointing fourth place in his first event of the season. Australia's Mitchell Watt was first with a leap of 8.44 meters (27.7 feet), far ahead of surprising second-place finisher, Su Xiongfeng of China, who jumped 8.19 meters (26.8 feet).
Olympic gold medalist Asbel Kiprop of Kenya was outsprinted in the stretch by countryman Nixon Kiplimo Chepseba in the men's 1,500 meters, a little over a week after he captured the men's 800 meters at the year's first Diamond League event in Doha, Qatar.
Chepseba finished in a time of 3 minutes 31.42 seconds, while Kiprop was second in 3:31.76 and Ethiopia's Mekonnen Gebremedhin was third in 3:32.36.
“It was not my day,” Kiprop said. “But I am better this year than last year. Last year, I did 3:32 and now 3:31. So this is a good start to the season.” Americans swept the men's 400 meters, with Calvin Smith winning with a time of 45.47, followed by Greg Nixon in 45.50 and David Neville in 45.58. Three-time Olympic gold medalist Jeremy Wariner won the event last year but decided not to defend his title.
Jamaica's Kaliese Spencer outsprinted a tiring Lashinda Demus of the United States at the finish to capture the women's 400-meter hurdles in 54.20 seconds. Olympic and world champion Melaine Walker of Jamaica, back on the track after missing most of the 2010 season with an Achilles injury, finished third.
Two-time world champion Yargelis Savigne of Cuba easily won the women's triple jump with a leap of 14.68 meters (48.16 feet), while the two-time world champion in the women's high jump, Blanka Vlasic of Croatia, won her event with an effort of 1.94 meters (6.36 feet).
