Johnson got the jump on Liu at the start of the race and still led the field with two hurdles to go, but as was the case in their Shanghai race the previous week, world record holder Liu finished strongly, winning by two hundredths of a second in a time of 13.14 seconds.
23-year-old American Wallace Spearmon ran the third fastest 200m time in history when he clocked a career best 19.65 seconds, while fellow American sprinter Leonard Scott won the 100m.
"I was just very happy to break my own record," said Spearmon.
"The crowd were very involved here and it has been a great day. I am just getting into great shape and I'm really starting to run fast."
With Daegu bidding to host the 2011 World Athletics Championships, the 200m specialist was more than happy to throw his support behind the bid.
"This event is something that will stand out in my life now and I will never forget it," Spearmon said.
"I have been treated very well and the track is excellent. I firmly believe that Daegu can win the bid for 2011."
In the longer events, Qatar's James C'Kurui won the 5000m, Kenya's Philemon Kimutai won the 1500m, while Kenyans filled all three places in the men's 800m when Wilfred Bungei finished ahead of compatriots William Yiampoy and Ismael Kombich.
Stefan Holm, Olympic high jump champion, won his event clearing the bar at 2.30m, while the javelin was won by Russia's Aleksandr with a 79.46m throw.
American Lauryn Williams suffered hamstring problems in her quest to win the women's 100m, as she went down to World Cup silver medalist Torri Edwards in a time of 11.35 seconds.
Russian world record holder Yelena Isinbaeva won the pole vault, but failed to clear the 4.80m mark.