World number 10 Allen needed only one half-century break to see off Xiao at the Waterfront Hall and set up a last-eight clash with Mark Williams, who defeated Stephen Maguire 4-3.
Maguire made breaks of 90, 123 and 107 to lead 3-2, but Williams, tournament winner in 2017 and who made a 111 in the opening frame, won the last two thanks to scores of 77 and 69.
Neil Robertson, world number three, will play world number four Mark Selby in the last eight after cruising to a 4-0 win against China's Li Hang.
Robertson made breaks of 102 and 60 and held his nerve in two other close-fought frames to progress, while Selby made a score of 132 on his way to a 4-2 win against Michael White after letting slip a 2-0 lead.
Tom Ford made two century breaks in his last-16 clash with world number 19 David Gilbert, but was edged out 4-3.
Ford notched successive scores of 100 and 110 to level the match at 2-2, but Gilbert, who had made a 132-break in the second frame, prevailed and will next play Zhou Yuelong, who beat Robert Milkins 4-0.
Lyu Haotian eased past Luca Brecel 4-0 to set up a quarter-final tie against Anthony McGill, a 4-0 winner against Tian Pengfei.