This chapter continues with the argument that the built-in tensions of the autonomous system – at once centralization and ethnicization – have intensified in the reform era, fueling ethnic strife in contemporary China. The focus of the chapter is the system of ethnic autonomy. On the one hand, the demise of class universalism and the rise of identity politics have made political centralization less justifiable but also more imperative, thanks to the centrifugal tendencies of identity politics, which are now unconstrained by class universalism. On the other hand, the demise of class universalism and the advent of identity politics have made autonomy rights more imperative but also more polarizing, as they are now instrumental to interethnic competition in a new market economy. These new institutional dynamics are illustrated with three contending perspectives from within China: the liberal autonomists, integrationists, and socialist autonomists. From different angles, the three schools help to highlight the institutional sources that contribute to increased ethnic tensions in Tibet and Xinjiang in the reform era.