The 21-year-old Cao, in his debut year on the main tour, edged out Tom Ford 10-9 before Liu (pictured) came from behind to beat Jamie Cope 10-7.
"I'm happy, Tom was unlucky and I played well," said Cao, who beat Jimmy White in the previous round.
"I wasn't nervous in the last frame, I just tried to play the balls."
Liang Wenbo, Yu Delu and Hong Kong's Marcu Fu are all still involved in qualifying and could complete what would be a strong Chinese contingent at the Crucible when action gets underway later in April.
Cao and Ford were all square at 2-2 when Ford was docked a frame for returning late to the table after the interval, helping the Chinese player take a 5-4 lead into the session break.
Leicester’s Ford bounced back in the second session, however, sneaking into a 7-6 lead before Cao took three frames in a row to leave himself just one away from qualifying for the final stages of a ranking tournament for the first time.
Ford bounced back again with his second century break of the match to level up at 9-9 before breaks of 39 and 58 helped Cao take the decider.
Liu was also forced to recover from a deficit when he found himself 5-4 down against Cope.
The 21-year-old reeled off four frames in a row, with highlight breaks of 71 and 138, to go 8-5 ahead before Cope hit back with a century break of his own.
But the world number 57 booked his second visit to the Crucible with victory in the 17th frame.
Full results:
Ken Doherty 10-9 Anthony Hamilton
Ricky Walden 2-10 Jamie Jones
Mark Davis 10-5 Robert Milkins
Ryan Day 10-8 Gerard Greene
Tom Ford 9-10 Cao Yupeng
Jamie Cope 7-10 Liu Chuang