The recursive computational mechanism generates an infinite range of expressions. However, little is known about how different concepts interact with each other within recursive structures. The current study investigated how Mandarin-speaking children dealt with possessives and generics in recursive structures. The picture-matching task showed that Mandarin-speaking children 4 to 6 had a bias for generics in ambiguous possessive constructions in Mandarin, where the genitive maker was covert (e.g., Yuehan de baobao chuang John’s kid bed, where baobao chuang kid bed has both a generic interpretation and a referential interpretation). It was found that that Mandarin-speaking children below 6 had a non-recursive interpretation of the possessive John’s kid(’s) bed, and instead understand kid’s bed to refer generically to a type of bed. This finding suggests that semantics does not parallel syntax in the acquisition of indirect recursion, in line with the prediction of the generic-as-default hypothesis which claims that generics are the default mode of representation of ambiguous statements when the statement can be either generic or non-generic. The delayed recursive possessive interpretation suggests that the full determiner phrase is acquired later than a noun phrase modification, which is universal in all languages. We also discuss the role of the overt functional category in the acquisition of indirect recursion.