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.