Remainder of Baoying era (762-763), and Guangde, Yongtai eras (763–766)

Li Fuguo effectively took over the control of the imperial government, going as far as telling Emperor Daizong:^[13]

You, Emperor, just remain in the palace. Let this old servant of yours handle what is outside.

Emperor Daizong was secretly displeased, but in order to placate Li Fuguo, gave him the title of Shangfu (尚父, meaning, "like father") and ordered that he not be referred to by name. He also made Li Fuguo Sikong (司空, one of the Three Excellencies) and Zhongshu Ling (中書令) – the head of the legislative bureau of government (中書省, Zhongshu Sheng) and a post considered one for a chancellor. Li Fuguo gave a major part of the command responsibilities to Cheng Yuanzhen. Carrying out further retaliation against Xiao Hua, Li Fuguo had Xiao further demoted.

Meanwhile, though, Li Fuguo did not expect that both Emperor Daizong and Cheng, who wanted more power, would turn against him. In summer 762, at Cheng's secret suggestion, Emperor Daizong issued an edict that stripped Li Fuguo of the titles of minister of defense and assistant of military affairs to the supreme commander—thus stripping him of military command—giving the latter post to Cheng. He also ordered Li Fuguo to leave the palace and take residence up outside, although he created Li Fuguo the Prince of Bolu. Li Fuguo became apprehensive and offered to retire, and Emperor Daizong declined and sent him away with formal respect. Because Li Fuguo had killed Empress Zhang and had supported him for the throne, Emperor Daizong did not want to kill him openly. Instead, on November 12, 762,^[14] an assassin got into Li Fuguo's mansion and killed him, taking his head and an arm away as well. Emperor Daizong formally issued an order seeking the arrest of the assassin, and buried Li Fuguo in a grand ceremony, after having a wooden head and wooden arm carved to be buried with the rest of the body.^[13]

At this point, Emperor Daizong still had to face Yan, now ruled by Shi Chaoyi—the son and successor to Shi Siming, who had killed and succeeded An Qingxu and recaptured Luoyang from Tang in 759. Late in 762, he sent the eunuch Liu Qingtan (劉清潭) to Huige to request aid from its Dengli Khan Yaoluoge Yidijian (a younger brother of the Huige prince that he had previously become sworn brother to^[15]), who had also received an alliance proposal from Shi Chaoyi. Yaoluoge Yidijian thus initially rejected Emperor Daizong's proposal and advanced south to aid Shi Chaoyi, but after further persuasion by Pugu Huai'en, whose daughter he had married, he agreed with the Tang proposal. In winter 762, the joint Tang and Huige forces recaptured Luoyang, forcing Shi Chaoyi to flee. (Shi Chaoyi would eventually commit suicide in spring 763, ending Yan.)^[13]

In the aftermaths of Yan's destruction, Emperor Daizong contemplated what to do with several Yan generals who had surrendered to Tang but who still retained substantial holdings—Xue Song, Li Huaixian, Zhang Zhongzhi (on whom Emperor Daizong soon bestowed the imperial surname of Li and a new personal name, Baochen), and Tian Chengsi. Pugu suggested that he allow them to remain at their posts as military governors (Jiedushi) to avoid further resistance, and Emperor Daizong, fearful of further wars, agreed. This would mark the beginning of warlordism that plagued Tang for the rest of the dynasty.^[13][16]

In fall 763, Emperor Daizong faced two new additional threats. Pugu, whom two other generals Xin Yunjing (辛雲京) and Li Baoyu and the eunuch Luo Fengxian (駱奉仙) had suspected of plotting rebellion, was angry at the suspicion on him and, after submitting a number of accusatory petitions, began to act independently of the imperial government. Meanwhile, though, Tibet, which had begun to seize Tang western prefectures one by one during the Anshi Rebellion, launched a sudden attack on Chang'an. At that time, with Cheng in power and the generals hating him for his previous accusations against the generals Lai Tian (來瑱) and Li Huairang (李懷讓) that led to their deaths,^[13][17] when Emperor Daizong sought emergency aid from the provincial generals, none came to his aid, and on November 16,^[18] he was forced to abandon Chang'an and flee to Shan Prefecture (i.e., Shancheng). Tibetan forces declared Emperor Suzong's cousin Li Chenghong the Prince of Guangwu the Emperor of Tang, although they withdrew within the course of a month due to the Tang people's resistance efforts and counterattacks commanded by Guo Ziyi. Emperor Daizong was able to soon return to Chang'an. Still, much territory had fallen into Tibetan hands and Tang forces were not able to counterattack. As the popular sentiment at the time blamed Cheng for the disaster, he stripped Cheng of his posts and sent him back to his home. Soon thereafter, the most powerful figures at court became the chancellor Yuan Zai, who flattered Emperor Daizong, and the eunuch Yu Chao'en, who commanded the imperial guards.^[17]

In 764, Emperor Daizong created Li Kuo, whom he had earlier signaled to be the likely heir by designating him the supreme commander of the armed forces, crown prince. Li Kuo's mother Consort Shen had been captured by Yan forces and disappeared during the Anshi Rebellion; Emperor Daizong sent many imperial messengers throughout the realm to search for Consort Shen, but was not able to find her.^[17]

Meanwhile, also in 764, Pugu Huai'en, then at Hezong (河中, in modern Yuncheng, Shanxi), formally rose against Tang imperial troops, against his mother's advice. An attack against Yuci (榆次, in modern Jinzhong, Shanxi), commanded by Pugu Huai'en's son Pugu Yang (僕固瑒), however, was repelled by Tang forces, and Pugu Yang's own soldiers killed him. Pugu, believing he was facing defeat, took his troops, largely from Shuofang Circuit (朔方, headquartered in modern Yinchuan, Ningxia), back to its headquarters at Lingwu and dug in there; he thereafter remained a threat to the Tang imperial government, although Emperor Daizong, still hoping that he would resubmit, never formally declared him a renegade, and when Pugu's mother, who did not follow him to Lingwu, died, he buried her with honors.^[17]

Around this time, the official Liu Yan headed a project to reopen Bian River (汴河), a canal that connected the Yellow River and the Huai River, which had been crucial for shipping food supplies from the Yangtze River-Huai River region to Chang'an and Luoyang prior to the Anshi Rebellion but which had become silted during the wars. After the project was completed, Chang'an again had adequate food supplies, allowing the region to begin to recover. Pugu, meanwhile, had allied with Huige and Tibet, and in late 764 and then again in 765 allied with them to attack the Chang'an region. After Pugu died in 765, however, the threat subsided, and his army resubmitted to Emperor Daizong. However, by this point, Emperor was facing, in addition to the four major Yan generals, two more military governors who were de facto independent, Li Zhengji and Liang Chongyi.^[17]

Also in 765, after Yan Wu (嚴武) the military governor of Jiannan Circuit died, the succeeding military governor Guo Ying'ai (郭英乂), resentful that the officer Cui Ning had not recommended him to succeed Yan, attacked Cui. Cui counterattacked and defeated Guo, who was killed in flight, and the circuit was thrown into a confusion. Eventually, the situation settled down, but the circuit eventually became effectively independently ruled by Cui, although Cui was more obedient and respectful to the central government than the other warlords. Emperor Daizong tried to have the chancellor Du Hongjian rule the circuit, but Du, unwilling to challenge Cui, soon returned to Chang'an and left the circuit in Cui's hands.^[19]

Early Dali era

Meanwhile, by this point, Emperor Daizong, who had previously favored Taoism, had begun to become a devout Buddhist due to the influences of his chancellors Yuan Zai, Wang Jin, and Du Hongjian. Yuan, in particular, advocated the belief that it was by the blessings of the Buddha that Tang was able to survive the Anshi Rebellion and Pugu's rebellion. As a result, Emperor Daizong's policies began to be heavily influenced by Buddhist principles, and he honored the Buddhist monk Bukong with great honors, including creating him a duke. The temples at Chang'an became very wealthy, and Emperor Daizong further ordered that monks and nuns not be subject to physical punishments. With the emperor and the chancellors all devout Buddhists, Buddhism became the leading influence in the empire. (Traditional historians, such as the Song dynasty historian Sima Guang, ascribed the poor governance and justice system during Emperor Daizong's time to this.)^[19]

In 768, after Li Huaixian was assassinated by his officers Zhu Xicai, Zhu Ci, and Zhu Ci's brother Zhu Tao, Emperor Daizong made an attempt to take back control of Lulong Circuit (盧龍, headquartered in modern Beijing), which Li Huaixian had governed. He made Wang Jin the military governor and Zhu Xicai the acting military governor. When Wang arrived at the circuit, Zhu Xicai paid him great respect but did not allow him to take actual rein of the circuit, and Wang returned to Chang'an soon thereafter. Emperor Daizong was forced to make Zhu Xicai the military governor later in the year.^[19]

In 770, Emperor Daizong, tired of Yu Chao'en's hold on power and arrogance, plotted with Yuan and laid a trap for Yu, killing him. Thereafter, however, Yuan's power became unchallenged at court.^[19]

In 772, Zhu Xicai was in turn assassinated by his subordinate Li Huaiyuan (李懷瑗), and Zhu Ci replaced him. Zhu Ci took a more respectful stand toward the imperial government, and thereafter, while the central government did not take back actual control of Lulong, Lulong soldiers often participated in campaigns commissioned by the imperial government. (Eventually, indeed, Zhu Ci himself would arrive at Chang'an and thereafter remain an imperial general near Chang'an and not return to Lulong, leaving Lulong in Zhu Tao's hands.)^[19][20]

Late Dali era

In 773, Xue Song died, and Emperor Daizong agreed to let his brother Xue E succeed him in ruling Zhaoyi Circuit (昭義, headquartered in modern Anyang, Henan). However, Tian Chengsi, who ruled nearby Weibo Circuit (魏博, headquartered in modern Handan, Hebei), had other designs. In spring 775, under his encouragement, the Zhaoyi officer Pei Zhiqing (裴志清) rose against Xue E, and Tian subsequently captured Zhaoyi's capital Xiang Prefecture (相州). Xue E fled to imperial territory, while Tian continued his campaign to capture the rest of Zhaoyi territory despite Emperor Daizong's orders to stop his campaign. With Xue Song's other relatives Xue Xiong (薛雄) and Xue Jian (薛堅) still holding Wei (衛州, in modern Xinxiang, Henan) and Ming (洺州, in modern Handan) Prefectures, Tian attacked them and captured those prefectures, as well as Ci Prefecture (磁州, in modern Handan as well). (The remaining prefectures of Zhaoyi came under imperial control and were eventually merged with Zelu Circuit (澤潞, headquartered in modern Changzhi, Shanxi), governed by Li Baoyu's cousin Li Baozhen.)^[20]

These defiant actions by Tian, who had already angered Li Zhengji, then ruling Pinglu Circuit (平盧, then headquartered in modern Weifang, Shandong), by disrespecting him and Li Baochen, then ruling Chengde Circuit (成德, headquartered in modern Shijiazhuang, Hebei), by killing Li Baochen's brother Li Baozheng (李寶正), brought a serious imperial response, along with the offended warlords. In summer 775, Emperor Daizong announced a campaign against Tian, with Li Zhengji and Li Zhongchen attacking Weibo from the south, and Zhu Tao, Li Baochen, and Xue Jianxun (薛兼訓) attacking Weibo from the north. Initially, the imperial forces were scoring victories over Weibo forces, but after Tian flattered Li Zhengji in a humble letter, Li Zhengji withdrew from the campaign, causing other imperial generals south of the Yellow River to hesitate to advance as well. Meanwhile, Li Baochen was offended when an imperial eunuch, Ma Chengqian (馬承倩), who had visited Li Baochen's army, was so dissatisfied with Li Baochen's gift to him that he threw it on the ground, and Tian was also able to use hoaxes to persuade Li Baochen that if he joined forces with Tian to attack Lulong, he would be successful. Li Baochen thus turned against Zhu, launching a surprise attack on him, but was unable to kill Zhu, effectively ending any hopes of the campaign against Tian. By 776, Emperor Daizong was forced to pardon Tian and abandon the campaign.^[20]

Also in 775, Emperor Daizong's favorite concubine Consort Dugu died. He posthumously honored her empress and, saddened greatly by her death, kept her casket in the palace for almost three years, only finally burying her in 778.^[20]

In 776, after the death of Biansong Circuit (汴宋, headquartered in modern Kaifeng, Henan)'s acting military governor Tian Shenyu (田神玉), its officer Li Lingyao (李靈曜) seized the circuit. Emperor Daizong commissioned a campaign by the surrounding circuits against Biansong and Li Lingyao, and despite aid from Tian, was quickly defeated, although the imperial government received little benefit as five of Biansong's eight prefectures were taken and merged into Li Zhengji's Pinglu Circuit, and Li Zhengji then moved his headquarters from Qing Prefecture (青州) to one of the Biansong prefectures he took, Yun Prefecture (鄆州, in modern Tai'an, Shandong).^[20]

In 777, Emperor Daizong, tired of Yuan Zai's and Wang Jin's corruption and hold on power, had them arrested. Yuan was executed and Wang was exiled, and they were replaced by Yang Wan and Chang Gun. Emperor Daizong hoped that Yang could lead a reform of the government, but Yang died later that year, leaving Chang in control of the government.^[20]

By 777, it was considered that these warlords were ruling their realms de facto independently:^[20]

• Li Zhengji, with his Pinglu Circuit containing 15 prefectures and having 60,000 soldiers.
• Tian Chengsi, with his Weibo Circuit containing seven prefectures and having 50,000 soldiers.
• Li Baochen, with his Chengde Circuit containing seven prefectures and having 50,000 soldiers.
• Liang Chongyi, with his Shannan East Circuit (山南東道, headquartered in modern Xiangfan, Hubei) containing six prefectures and having 25,000 soldiers.

In 779, Tian died, and Emperor Daizong permitted Tian's nephew Tian Yue to succeed him. Meanwhile, Li Zhongchen was expelled from his Huaixi Circuit (淮西, headquartered in modern Zhumadian, Henan) by his officer Li Xilie. Emperor Daizong, believing Li Zhongchen to have been faithful to him, kept him at Chang'an as a chancellor, while making Li Xilie acting military governor.^[20]

In summer 779, Emperor Daizong grew ill and soon died. Li Kuo succeeded him as emperor (as Emperor Dezong).^[20]