For Mr Liu insists one of his sheep has given birth to a dog.
The 'puppy' has wool like a lamb but its mouth, nose, eyes, paws and tail look more like a dog's.
His 'sheep dog' even plays like a hound.
The birth has prompted thousands to flock to his farm in Shaanxi Province to see for themselves.
Mr Liu told how he found the unusual baby animal shortly after it was born in one of his fields.
‘I was herding the sheep, and saw a sheep licking her newborn lamb on the grassland. The lamb was still wet,’ he said.
‘When I went up close to check on the lamb I was shocked because it looked so weird, like a cross between a sheep and a dog.
‘I was a bit frightened, as I've been raising sheep for 20 years and had never seen such a creature.’
Yue Guozhang, a researcher at Xi'an City Animal Husbandry Technology Centre, said sheep and dogs were different species.
‘It's not possible that a sheep could become pregnant with a puppy,’ he said. ‘It's likely that this is just an abnormal lamb.’