The first sentence is probably parsed wrong, Chinese fairy/mythological novels are very popular in China, they've surpassed Chinese martial arts novels which has broken my heart because the fairy/mythological novels suck:
https://en.wikipedia.org/wiki/Xianxia_novel
Note 仙 can mean fairy in Chinese, they are part of the Chinese category known as 仙侠 or 玄幻，which is Asian/Chinese themed fantasy that differs from Western fantasy novels because its about Taoism/Buddhism, Chinese dragons, demons, immortals and Chinese legends.
As well Chinese magical fantasy or 奇幻 is still alive and well but they're basically Western fantasy genres written by Chinese people with similar ideas of Kings, Queens, Western Dragons.
Xinxia has some really high highs, and some really low lows. There are epic moments that make your blood pound mixed with endless repetition of things like mc meeting paper thin arrogant masters that are there only for some satisfying face-slapping scene.
Note 仙 can mean fairy in Chinese, they are part of the Chinese category known as 仙侠 or 玄幻，which is Asian/Chinese themed fantasy that differs from Western fantasy novels because its about Taoism/Buddhism, Chinese dragons, demons, immortals and Chinese legends.
As well Chinese magical fantasy or 奇幻 is still alive and well but they're basically Western fantasy genres written by Chinese people with similar ideas of Kings, Queens, Western Dragons.