Liu Yi meets the wretched shepherdess.

The treasure trove of Chinese folklore was compiled as oral traditions, stories being passed down from generation to generation within each of China's fifty-six nationalities. The Han Chinese, Mongolians, Chinese Turkistanis (Chinese Muslims), and Tibetans form the largest populations among these nationalities and have made the major contributions to China's precious cultural heritage. Chinese folktales integrate the wisdom, morality, ethics, hope, humor, justice, and customs of China's many peoples.

The origins of Chinese folklore can be traced back to the Neolithic era and its development parallels the advancement of China's different social and cultural groups.