The word "上等" (shàngděng) is formed through the standard Chinese compounding process where two meaningful characters, each with their own independent definitions, are combined to create a new, specific term. The first character, "上" (shàng), carries the core meaning of "upper," "top," or "superior," while the second character, "等" (děng), means "grade," "class," or "rank." When combined in this adjective-noun structure, with "上" modifying "等," the compound literally means "upper grade" and semantically conveys the meaning of "top-grade," "first-class," or "high-quality."