<p>The term “Chinese tragedy” remains contested ever since the concept of tragedy was first introduced into modern Chinese literature. The intellectual debate on “whether there is a Chinese tragedy” constitutes an important part of Chinese critical tradition in the 20th century, which arouses concerns over the means and ends in the Chinese appropriation of foreign concepts. This paper approaches the long-lasting debate from a terminological point of view: it reveals both the conceptual and lexical confusion between the theatrical and aesthetic meanings of tragedy in some existing Chinese scholarship, and believes it should be responsible for the unsettled arguments on the existence of Chinese tragedy. In the attempt to revisit and reproduce the realities of modern Chinese acceptance of the concept of tragedy, this paper presents how the indigenous literary practice interprets and positions itself in the context of global modernisation, and concludes that the debate over the generic legitimacy of Chinese tragedy has revealed not a simple matter of academic dispute, but a more complicated issue concerning the problematic terminology caused by the vague definition of tragedy in both modern and contemporary Chinese academia. Therefore, by adopting a historical-contextual approach to trace the discursive construction of “tragedy” in the unique Chinese context, this paper proposes that clear and proper distinctions, both conceptually and lexically, are needed among different meanings of tragedy in current Chinese literary discourse in order to resolve the controversies centred around the study of Chinese tragedy.</p>