Emperor Xiaowen implemented a drastic policy of sinicization, intending to centralize the government and make the multi-ethnic state easier to govern. These policies included changing artistic styles to reflect Chinese preferences and forcing the population to speak the language and to wear Chinese clothes. He forced his own Xianbei people and others to adopt Chinese surnames, and changed his own family surname from Tuoba to Yuan. He also encouraged intermarriage between Xianbei and Han.
In 494, Emperor Xiaowen moved the Northern Wei capital from Pingcheng (in modem Datong, Shanxi) to Luoyang, a city long acknowledged as a major center in Chinese history. The shift in the capital was mirrored by a shift In tactics from active defense to passive defense against the Rouran. While the capital was moved to Luoyang, the military elite remained centered at the old capital, widening the differences between the administration and the military. The population at the old capital remained fiercely conservative, while the population at Luoyang was much more eager to adopt Xiaowen's policies of sinicization. His reforms were met with resistance by the Xianbei elite, in 496, two plots by Xianbei nobles; one centered around his crown prince Yuan Xun, and one centered around his distant uncle Yuan Yi. By 497, Xiaowen had destroyed the conspiracies and forced Yuan Xun to commit suicide.
Unfortunate for Emperor Xiaowen, his sinicization policies had their downsides---namely, he adopted the Jin Dynasty social stratification methods, leading to incompetent nobles being put into positions of power while capable men of low birth not being able to advance in his government. Further, his wholesale adoption of Han culture and fine arts encouraged the nobles to be corrupt in order to afford the lifestyles of the Han elite, leading to further erosion to effective rule. By the time of his grandson Emperor Xiaoming, Northern Wei was in substantial upheaval due to agrarian revolts, and by 534 had been divided into two halves, each of which would soon be taken over by warlords.