With the enemy in chaos and reinforcement pouring in from the north gate, the defenders' morale was instantly boosted and a large scale counterattack was immediately launched. The communist force consisted of a battalion of the 12th Regiment of the communist Independent 4th Brigade and the 718th Regiment of the communist 359th Brigade inside the city was annihilated by the renewed counterattack by the defenders. The highest ranked commanders for both communists units, Wu Huamin (), the chief-of-staff of the 12th Regiment of the communist 4th Brigade and Wu Xidu (), the deputy chief-of-staff of the 718th Regiment of the communist 359th Brigade were both killed in action as the communists inside the city attempted to breakout. The communists outside the city wall had completely run out any reserve by this time and could not stop the slaughter of their comrades inside the city. At the same time, the communist 2nd Column learned that the nationalist Reorganized 100th Brigade had left Banqiao and approached Heshui fast, and thus was forced to abandon its effort to take the town. The 12th Regiment of the communist Independent 4th Brigade held the position at Southern Temple Yuan (Nan Si Yuan, ) to the south of Heshui while the 718th Regiment of the 359th Brigade held the position at Elang Mountain (E Lang Shan, ) to cover the communist to the northwest of Heshui. After the complete withdrew, the nationalist Reorganized 100th Brigade reached the region in the afternoon, and finding no enemy, the 2nd Regiment of the nationalist Reorganized 100th Brigade took over the defense of the city while the nationalist Reorganized 8th Cavalry Brigade withdrew to Western Peak region to regroup and re-supply. Ma Zhongfu (), a nationalist officer who was the youngest brother of Ma Zhongying was named as the mayor and the commander-in-chief of the urban defense. The campaign concluded with nationalist victory.