The Literary Mind and the Carving of Dragons – the 28th chapter of Tradition and Change, illustrates that the principle of change in literary is to make the revival of tradition classics. Hence, the classical Confucianism should be the starting point of making new literary and artistic creation when there are so many cultural heritages surrounding. In order to maintain the core of Classics when changing, it is necessary to encounter and explain the impact of Li Sao, whose ideological sphere is different from Confucianism but with the tremendous influence and literary value. Different from transplanting Li Sao into Classic of Poetry (or Shijing) indiscriminately by Han academicians, Liu Hsieh recognizes the difference of Li Sao, and also deems the guide of change as following: it needs to study Li Sao dialectically before innovating new changes successfully. In the process of studying and understanding Li Sao, Liu sticks to principal as classical Confucianism, meanwhile he adapts to new trend of literature in order to take both classics and new in to his conception of tradition and change. This method is to have mainstream culture coexist with second arising culture, but also to keep the different characters of two cultures, considering inheritance and innovation, which is the construction of Liu Hsieh’s whole conception of tradition and change.