'Xiǎo péng you' literally means 'little friend' — 'xiǎo' (small/young), 'péng' and 'yǒu' together form 'péng yǒu', meaning 'friend'. Though it contains the word for 'friend', it is rarely used to refer to actual peers; instead, it's a warm, affectionate, and respectful term for children, especially when addressing them directly or speaking about them in polite or educational contexts. It carries a tone of kindness and care, commonly used by teachers, parents, caregivers, and service staff (e.g., in kindergartens, museums, or hospitals).

The term avoids the bluntness of 'hái zi' (child) and is more gentle and inclusive than 'ér tóng' (a formal literary term). It’s gender-neutral and age-appropriate for roughly ages 3–12. In spoken Chinese, it’s often repeated for extra warmth: 'xiǎo péng you men' (children, plural), though the base form 'xiǎo péng you' can be singular or plural depending on context.