Prerequisites: Complete A Token of Appreciation, give Xiao a Moon Brooch
Reward: None
Unlocks: Dating with Xiao
A pair of workaholics hooking up? Clearly it was meant to be. Once you've completed three quests in Xiao's storyline you'll be sufficiently familiar with him to take your relationship to the next level. In order to romance Xiao you'll need a Moon Brooch from Silky Stitch Tailor's. You'll need to exchange five Moon Cloves for a Moon Brooch. Put in more hours at the Clinic, healing sick patients, if you're running low on Moon Cloves.
Track down Xiao - as ever, he'll likely be working at Town Hall - and give him the Moon Brooch. He'll take you back to his house to discuss the matter, and seems quite happy to be wooed. The two of you will have a nice little time, and Xiao will cook up a meal to commemorate the occasion.
From this point on you and Xiao will officially be dating. In addition to more affectionate interactions with him from this point on, you can choose to go on dates with Xiao. You can go on one date each day by interacting with him.