Of course ethnicity is fluid. It always was in human history. Especially so in China. Just look at the various people who have historically and contradictory been called Han and Nanren during the Song-Liao-Jin-Yuan dynasties.
Cheng Yan, in the 9th century on what it means to be a Chinese ethnic:
There have long been diverse barbarian peoples [siyi 四夷] who have been
multilingual and have come to China [zhonghua 中華]. They admire the humanity,
righteousness, loyalty, and honesty of China. Although their origins lie in alien regions,
they are able speedily to direct their hearts toward China [hua 華]. Therefore, I don’t
refer to them as barbarians [yi 夷]. There are people of the Central Kingdom who have
long stubbornly resisted kingly transformation. They have forgotten humanity,
righteousness, loyalty, and honesty. Although their origins are in China, their hearts skulk
among the barbarians. Therefore, I don’t refer to them as Chinese. They have not been
banished to the barbarians by the state. Rather, they themselves are responsible for their
hearts wallowing in iniquity. Should we not then stop referring to people as Chinese just
because they are named Chinese, and stop referring to people as barbarians just because
they are named barbarian?
There are people who are named Chinese but who have barbarian hearts. There
are people who are named barbarians but who have Chinese hearts. The former, who,
though living in the Central Kingdom, have knowingly abandoned humanity,
righteousness, loyalty, and honesty, are none other than barbarians of the Central
Kingdom. There is no need for the barbarians to invade us. Those who disobey the orders
of the Central Kingdom, who arrogantly act without authorization and do not accept royal
authority, and who discard humanity, righteousness, loyalty, and honesty, are
incompatible with social norms. How can they not be barbarians of the Central Kingdom?
Those of the barbarians who look inward and admire China, who delight in our humanity,
righteousness, loyalty, and honesty, and who desire to be part of human society, how can
they not be the Chinese of the barbarians? Mark my words. There are those called
barbarians who are not barbarians. Then, there are people with the name of Chinese who
fail to measure up to those called barbarians.