LIU, XIE's The Literary Mind and the Carving of Dragons conducts a diachronic observation and comparison of the changes in the development of prose genre "discourse" ("lun"). Speaking of the origin of the genre of discourse and its paradigm, LIU, XIE's criterion is "explaining the sages and understanding the classics." However, when it comes to diachronic observation, in which the controversy between "upholding being" and "valuing nothingness" is discussed, LIU, XIE's discussion shows a discrepancy from his previous stance. He proposes "the ultimate state of Prajna" as a move beyond the being-nothingness controversy. "Prajna" is a concept from Buddhist canons that is accepted by most people. Prajna is as the only notion that LIU, XIE, as a Buddhist, specifies as related to Buddhist canons or philosophy in the entirety of The Literary Mind and the Carving of Dragons, without specifying the title and author it refers to throughout. Owing to the lack of scholarly elaboration on this question, this article aims to clarify it by comparing the discussions on "discourse" over the history of its development and transformation, and by reading LIU, XIE's approach to Buddhist discourse and prose genres in The Literary Mind and the Carving of Dragons, thereby identifying the relationship between "Prajna" and "discourse." On this basis, this article analyzes the reason for which LIU, XIE had a high regard for the discourse on "Prajna."