One judge scored the 12-round fight as a 113-113 draw but with the other two in favour of Xiong 113-110 and 115-112, the Chinese held onto the belt he claimed from Javier Martin Resendiz last November.
Xiong improved his record to 21 wins, four losses, one draw and 11 knockouts after the bout at the World Trade Centre - the Middle East's first WBC championship title fight.
Filipino Cuello, whose long wait for a world title chance ended in disappointment, saw his record slip to 33 wins, five defeats and six draws.
It was Cuello who started brighter though, scoring a knockdown in the first round. But he failed to build on that good opening and Xiong - China's first pro boxing champion - went on to wrap up the victory.