The example he gave is not a good one. I instantly recognized both words because the Chinese word for dragon is a single character and in English, words are separated by spaces.
Often times, words in Chinese are made up of 2 or 3 characters, or even 4.
Take for example this word [set?]
可口可樂
This means Coca-Cola in Chinese. In an English sentence, Coca-Cola is unmistakable as it's a word surrounded by spaces. In Chinese, we don't use spaces, we must decide for ourselves when words start and words end.
Furthermore, 可口 means thirsty. So it wouldn't be until I got to the third character that I would know I'm not reading thirsty (though more realistically context should have defined it for me already).
I find Chinese sentences involve much fewer syllables than English though, so perhaps there is some merit to that.