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This study aims to examine how ethnic discrimination is depicted in the short story "Know Thy Neighbors" by Eric Musa Piliang. The study utilized a descriptive qualitative method. The researcher utilized transitivity as a tool to analyze the sentences. The analyzed sentences were interpreted and connected to the story's background and the social context concerning ethnic discrimination. The findings were discussed based on three discourse dimensions proposed by Fairclough. The study revealed that racism against Indonesians of Chinese descent is described through various forms of physical violence. The short story also delves into an indepth analysis of social practices, specifically focusing on the causes of racism against Indonesians of Chinese descent. It highlights how economic anxiety and media influence significantly shape public opinion.