"They are both Chinese."
I believe when gender is unknown, or, more specifically, when it is not known for certain that "they" are all female, then 他们 is epicene. That is:
- 她们 = "they" all female (only)
- 他们 = "they" all male
- 他们 = "they" mixed male and female
- 他们 = "they" of unknown gender
- 它们 = "they" inanimate objects, or animals.
This is true, but in the absence of any real context, we can imagine any of the above contexts.
In other words, if we were using this sentence in an actual conversation, we'd have some grounds to choose among the different homophones, but in the absence of such grounds, it makes sense for Duo to be liberal in its acceptance of alternatives.
In a conversation there would be some context by which it was clear that "All two of them", i.e. "Both of them" or "They ... both", was implied, whereas in this exercise we just get the context from the sentence we're translating.
However, there are ways to be more specific. For example, I tried "他们两个都是中国人" and it was accepted.
Which would be a rare sentence in English. "They two" isn't often used. Colloquially, I would say it's virtually never used, and even formally I wouldn't really expect to hear it. I imagine many native speakers would even think it was wrong (though it's grammatically correct).
"The two of them are Chinese" and "Those two are Chinese" would be common ways of saying it. And both of these are essentially equivalent to "They're both Chinese" and "Both of them are Chinese", so TherMaster11's sentence should be accepted.
(Nice to see you again, PeaceJoyPancakes (^v^))
Logically, both convey the same factual information, but the emphases (in Chinese) are slightly different (rhetorically different).
Since Duolingo's translations are usually quite wild, I guess it's fair for it to accept TherMaster11's answer.