In 498, when Emperor Xiaowen carried out a major southern campaign against rival Southern Qi, Yuan Xie was one of the key commanding generals, although it is not clear whether he saw combat. Also that year, Emperor Xiaowen made him in charge of the imperial clan members' education (presumably of a sinicized education). Later that year, due to the military expenditures, Yuan Xie proposed that he himself donate one-year salary for the war effort; in response, Emperor Xiaowen ordered a general one-third reduction in salary for imperial princes and dukes. That winter, Emperor Xiaowen got extremely ill, and Yuan Xie personally attended to him in his illness, praying to the gods and their father Emperor Xianwen, offering to die instead of Emperor Xiaowen. Emperor Xiaowen subsequently recovered from this illness.