The 52-year-old writer received the award yesterday during the 73rd World Science Fiction Convention in Washington for his Chinese science fiction bestseller "The Three-Body Problem".
"The Three-Body Problem" is a trilogy depicting an alien civilisation's invasion of Earth during China's Culture Revolution. It centers on a secret military project that enables humans to establish contact with the alien civilization teetering on the edge of extinction.
The series portrays the centuries of clashes between earthlings and the Trisolaran civilisation living in a three-sun system.
Liu said the accolade would boost the export of Chinese sci-fi works to the US and help Americans better understand Chinese sci-fis, but he refrained from overestimating its boost on China's sci-fi writing.
"Science fiction writing across the world is on a decline which I assume is because technology is losing its mystery, while mystery is an important backbone of sci-fi composition," he said.