Difference 1: process
The round shape of tangyuan is created by hand. You shape the rice flour dough into balls, create an indentation in the dough, add the filling, then close it up and smooth out the dumpling by rolling it between hands. Nowadays, tangyuan often come in rainbowlike colors.
Though yuanxiao are also round, the shape is not made by hand. The fillings are pressed into hardened cores, dipped lightly in water and rolled in a flat basket containing dry glutinous rice flour. A layer of the flour sticks to the filling, which is then again dipped in water and rolled a second time in the rice flour. And so it goes, like rolling a snowball, until the dumpling is the desired size.
