Xu grew up in Fujian Province, the oldest of the eight children. After graduating from high school during the Cultural Revolution in the 1960s, he was sent to the countryside to work as a barefoot Doctor. In the 1970s, he emigrated to Hong Kong and worked as a textile worker.
In 1988, he claimed to invest RMB$1.2 million in a knitting factory in his hometown, but he intended to build a hotel instead, although Investments in private hotels were forbidden at that time. However, as soon as the construction was completed, the government policy was changed to allow private owners to have their hotels. Then Xu became the owner of the first private three-star hotel in China. He then started to invest into developing residential complexes and resorts in Fujian.
In the 1990s, he pushed his real estate Business into Beijing and Shanghai. He undertook several property ventures in Australia in the 1990s. In 2005, The New York Times reported he had moved his family to , Australia. He completed his Master of Business Administration via distance-learning from an Adelaide university and invested in real estate in the early 1990s. During the 2003-04 year, Xu was the largest individual donor to the NSW branch of the Australian Labor Party.
In the 2000s (decade), he expanded his Business by acquiring listed companies including Shimao Holdings (listed on the Shanghai Stock Exchange) and Shimao International (previously listed on the Hong Kong Stock Exchange), while the latter was privatized by him in 2007. Shimao Property was listed on the Hong Kong Stock Exchange in 2006.
In 2008 it was rumoured that Xu was interested in buying Newcastle United F.C. from under fire owner Mike Ashley.