This chapter focuses on the transformation of approaches to ethnicity in China’s transition from empire to nation state. That is, how and why these approaches evolved from a maintenance-oriented strategy aimed at pacification and stability in pre-modern times to a transformative strategy aimed at classifying and engineering identities in the socialist era. Historically Confucian universalism provided a neutral and inclusive approach to ethnicity, but it could not accommodate the idea of the nation in modern times. After late Qing and Republican failures at nation building, the CCP accomplished this task through a mix of class universalism and state classification of identities. The new approach served to incorporate minority members as equal citizens in the new modern state by politicizing previously localized identities at the national level. The contradictions therein – promoting political incorporation but also ethnic identities to fit that goal – or centralization and ethnicization, created the first set of institutional dynamics for ethnic strife in contemporary times.