[2][3][4][5] It is used on occasion by many ethnic minorities who adhere to Islam in China—mostly the Hui, but also the Dongxiang and the Salar—and formerly by their Dungan descendants in Central Asia.

Xiao'erjing is unusual among Arabic script-based writing systems in that all vowels, long and short, are explicitly notated with diacritics, making it an abugida.

Some other Arabic-based writing systems in China, such as the Uyghur Arabic alphabet, use letters and not diacritics to mark short vowels.

In Shanxi, Hebei, Henan, Shandong, and eastern Shaanxi, as well as also Beijing, Tianjin and the northeastern provinces, the script is referred to as Xiǎo'érjīng, which when shortened becomes Xiǎojīng or Xiāojīng (the latter Xiāo has the meaning of "to review" in the aforementioned regions).

In Ningxia, Gansu, Inner Mongolia, Qinghai, western Shaanxi and the northwestern provinces, the script is referred to as Xiǎo'érjǐn.

Centuries later, these peoples assimilated with the native Han Chinese, forming the Hui ethnicity of today.

Many Chinese Muslim students attended madrasas to study Classical Arabic and the Qur'an.

This method was also used to write Chinese translations of Arabic vocabulary learned in the madrasas.

Thus, a system of writing the Chinese language with Arabic script gradually developed and standardized to some extent.

Currently, the oldest known artifact showing signs of Xiao'erjing is a stone stele in the courtyard of Daxue Xixiang Mosque [de] in Xi'an.

The system would be devised by the writer himself, with one's own understanding of the Arabic and Persian alphabets, mapped accordingly to one's own dialectal pronunciation.

Xiao'erjing cannot display the tones present in Chinese, syllable endings are indistinguishable, i.e. xi'an and xian.

Written and printed materials of Xiao'erjing were also collected by researchers, the ones at Nanjing University being the most comprehensive.

Below is the list of final and vowel endings in each syllable representing each Hanzi in Xiao'erjing.

Article 1 of the Universal Declaration of Human Rights in Xiao'erjing, as well as simplified and traditional Chinese characters, pinyin, and English: 「人人生而自由，在尊嚴和權利上一律平等。他們賦有理性和良心，並應兄弟關係的精神互相對待。」 Below is the first sura (chapter) of the Quran, Al-Fatiha, its original Arabic text, English translation, as well as the Chinese translation in Simplified Chinese characters and in Xiao'erjing, as published (un-edited) in 1995 by Ma Zhenwu (马振武).

Furthermore, as is the tradition for Xiao'erjing texts, there are instances where Arabic or Persian loanwords are used and written directly, these are shown in bold.

It's noteworthy to mention that in this document, the Hanzi characters are written from right to left, following the flow of the Arabic text of the Quran and the Xiao'erjing translation.

Gǎn zàn tiáo yǎng pǔ shì jiè de.

Zhí zhǎng huán bào rì zǐ de zhǔ.

Qiú nǐ yǐn lǐng wǒ men zhì duān zhuāng de lù dào nà yī xiē rén de lù dào.