Ding Xiaoqi was separated from her parents during the Cultural Revolution in China and lived alone for five years: her actor-father was gaoled, while her mother was sent to the countryside for re-education. From 1977 to 1989, she worked as a stage director and lyricist for the Navy Song and Dance Troupe. In 1986 she graduated from the People's Liberation Army Arts Academy with a Bachelor of Arts degree in Chinese Literature. Between 1984 and 1989 she wrote several short stories and novellas; she also wrote the screenplay for Army Nurse, the film version of her story Maidenhome. Some of the short stories that would later be published in Maidenhome (1993) soon began appearing in issues of Australian Short Stories. In 1990 she was appointed Visiting Fellow in the Cinema Studies Division of La Trobe University. From 1990 to 1993 she was Artistic Director of the Chinese International Arts Festival in Melbourne. She has written two unpublished plays about the lives of Chinese students in Australia: The Gate to Paradise (1991) and Kiss Yesterday Goodbye (1992). Both were staged in Melbourne by the Chinese-language Gold Mountain Theatre Group.
In 1996, with Ouyang Yu , she co-founded Otherland, Australia's first Chinese-language literary journal. She has worked as a novelist, stage director, screenwriter, lyricist and poet with extensive credits in China. Much of her writing is focussed on everyday issues in the lives of women in contemporary Chinese society.