After the Huns, led by the ruthless Shan Yu, invade Han China, the Chinese emperor begins to command a general mobilization. Each family is given a conscription notice, requiring one man from each family to join the Chinese army. When Fa Mulan hears that her elderly father Fa Zhou, the only man in their family, is once more to go to war, she becomes anxious and apprehensive. She decides to deal with this herself by disguising herself as a man so that she can go to war instead of her father. When her family learns of Mulan's departure, they all become anxious. Grandmother Fa, Mulan's grandmother, prays to the family ancestors for Mulan's safety. The ancestors then order their "Great Stone Dragon" to protect Mulan. The ancestors are unaware that the statue of Great Stone Dragon failed to come to life, and that Mushu, a small dragon, is the one sent to protect Mulan.
Mulan is misguided by Mushu in how to behave like a man, which starts a ruckus at the training camp. However, under command of Li Shang, she and her new co-workers at the camp, Yao, Ling and Chien-Po, become skilled warriors. Mushu, desiring to see Mulan succeed, creates a fake order from Shang's father, General Li, ordering Shang to follow them into the mountains. The troops set out to meet General Li, but arrive at a burnt-out encampment and discover that General Li and his troops have all been killed by the Huns. As they solemnly leave the mountains, they are ambushed by the Huns, but Mulan cleverly uses a cannon to create an avalanche which buries most of the Huns. An enraged Shan Yu slashes her in the chest, and her deception is revealed when the wound is bandaged. Instead of executing Mulan as the law requires, Shang relents and decides to spare her life for saving him, but expels her from the army, stranding her on the mountain as the rest of the army departs for the Imperial City to report the news of the Huns' demise. However it is revealed that several Hun warriors including Shan Yu survive the avalanche, and Mulan catches sight of them as they make their way to the City, intent on capturing the Emperor.
At the Imperial City, Mulan is unable to convince Shang about Shan Yu's intentions. The Huns appear to capture the Emperor, then they lock up the palace. With Mulan's help, Yao, Ling, and Chien-Po pose as concubines and are able to enter the palace and, with the help of Shang, they defeat Shan Yu's men. As Shang prevents Shan Yu from assassinating the Emperor, Mulan lures the boss Hun onto the roof where she engages him in solo combat. Meanwhile, acting on Mulan's instructions, Mushu fires a bundle of fireworks rockets at Shan Yu on her signal. The fireworks strike Shan Yu and explode, killing him. Mulan is praised by the Emperor and the people of China, who all bow to her as an unprecedented honor. While she accepts the Emperor's crest and Shan Yu's sword as gifts, she politely declines his offer to be his advisor and asks to return to her family. She returns home and presents these gifts to her father, but he is more overjoyed to have Mulan back safely. Having become enamored with Mulan, Shang soon arrives under the guise of returning her helmet, but accepts the family's invitation for dinner. Mushu is granted a position as a Fa family guardian by the ancestors amid a returning celebration.

Question: What does Shang Li do after he discovers Mulan is a woman?
Answer: He sets her free because she saved his life fighting Shan Yu.
Alternative answer: Spares her life, but leaves her in the snow