Abstract: Chapter 3 delves into the world of peer interactions. I present general patterns of children’s social networks, highlighting the importance of child-to-child ties. I illustrate the key features of this humorous, playful world and examine how peer play facilitates children’s moral learning. In peer play children are developing what I call “the spectrum of moral sensibilities:” They are learning about and engaging in cooperation and care, conflict and dominance, and creating gray areas in between. This poses a stark contrast to the imagery of “the innocent child” permeating in historical and philosophical views of Chinese childhood that fixate on the brighter side of human nature in moral cultivation. Moreover, through deciphering children’s pretend play, I argue that these non-elite children, often relegated to history’s silent margins, have a much richer inner life than my predecessors assumed. Lastly, using a human–machine hybrid approach, I find that young learners’ sensibilities in discerning layered intentions and moral sentiments defeat AI algorithms. This sheds light on the mystery of human sensemaking and inspires reflections on ethnographic epistemology.