"XO” is slang for “luxurious” in Hong Kong.
The sauce, a dim sum staple, is rumored to have been concocted in the 1980s at the exclusive Peninsula Hotel in Kowloon, a northern part of modern Hong Kong. It was named after the trendiest drink at the time, XO, or “extra old,” cognac, even though the sauce typically doesn’t contain the liquor. Expensive and time-consuming to make, the recipe features an intricate series of steps designed to coax flavor out of specialty ingredients. Many chefs and home cooks agree that well-made, high-quality sauce is worth a steep price for the depth and umami it can lend to dishes.