In 485, Emperor Xiaowen created Tuoba Xie the Prince of Shipping. During the years, as Emperor Xiaowen assumed more and more of governing responsibilities himself, he increasingly had Tuoba Xie participate in his decision-making. In 496, as part of Emperor Xiaowen's sinicization campaign, the entire imperial clan's surname was changed from Tuoba to Yuan, and at the same time, Yuan Xie's title was changed from Prince of Shipping to Prince of Pengcheng. Yuan Xie was apprehensive about having too much power, and several times requested to be relieved of his responsibilities; each time, Emperor Xiaowen refused. Also in 496, Emperor Xiaowen, angry that another brother, Yuan Xi (元禧) the Prince of Xianyang, had married a daughter of a servant as his princess, forcibly ordered all of his brothers to demote their wives to concubine status and marry the daughters of several high level officials, and Yuan Xie was required to marry Li Yuanhua (李媛华)，the daughter of Li Chong (李沖).