Footage appears to show the device fully extended in a landscape orientation before the edges are bent and folded backwards, creating a smaller central display.
The radical design is currently a mere engineering concept but the firm, dubbed 'Chinese Apple', says it may go into production in the future, if demand is sufficient.
Xiaomi co-founder and president Lin Bin said the device remains unnamed and revealed the tech giant is open to suggestions from the public.
Two existing potential names include the Xiaomi Dual Flex and Xiaomi MIX Flex.
Lin Bin said in his Weibo post: 'After conquering a series of technical problems such as flexible folding screen technology, flexible cover technology, and MIUI adaptation, we have produced the first folding screen mobile phone.
'It should be the world's first double folding mobile phone.
'This symmetrical double-folded form perfectly combines the user experience of the tablet and mobile phone, making it both practical and attractive.
'Although this phone is an engineering model, I’d like to show it to everyone.
'Welcoming everyone to forward / comment / like. If everyone likes it, we will consider mass producing the phone in the future.
'Also, we’d like to name this engineering model. What should we name it? I thought of two: Xiaomi Dual Flex, Xiaomi MIX Flex. Welcome suggestions!'
The handset converts flawlessly from a tablet-sized device with an approximate 4:3 ratio to a more traditional and compact phone-like device when the screen is folded.
Details about the handset besides its revolutionary screen are sparse as the firm says it is an early-stage engineering model.
There is no sign of a camera but the firm appears to have altered the MIUI software for the foldable phone as the screen automatically adjusts when moved and folded.
The transition is far from flawless with the software grappling briefly with the folding but the demonstration is a stunning proof of concept.
If the device makes it to the production line it will likely face stiff competition from Samsung, Lenovo and Huawei in the emerging and rapidly surging folding phone market.
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