There's not a lot to say about Xiaodan Li except that he's as close as it comes to being a free dude in your starting posse. With his value of 2 + Kung Fu 1, he's not going to be the best at pulling off techniques, but the fact that he can allow an Anarchist player to have 6 starting dudes makes him worth it even if you completely ignore his ability.
Xiaodan is basically the quintessential bullet catcher, serving as a body you can sacrifice or risk without too much on the line. His 1 draw bullet rating can make him quite relevant in a shootout, especially with cards like Ricochet in the opponent's hand, where you often want to pick a shooter who you can afford to lose if things go badly. He can also be turned into a pretty solid threat in his own right with cards like Bowie Knife or Consecration that turn dudes into studs and raise their bullets.
He can be a bit of a liability if run in a skill deck since he has such low value, and 1 extra starting GR is certainly not nothing, but he's definitely good value for his price in basically any situation