When it came to killing Cetra, Jenova had more than a few tricks up her metaphorical sleeve. She could read kinds and alter her own body, posing as friends and allies to gain their trust. she altered pieces of her own genes and spread them as viruses, sometimes to torture and kill, other times to turn the Cetra into monsters.
But Jenova had one special pet project she kept hidden away, far from the Northern Crater. She took one young Cetra and tortured him, breaking him in body and spirit. Into him she put the best of her twisted genetic experiments, together with twisted and corrupted essences of the Lifestream, until what was left was a being with powers unlike any other. In time, she was brought down and sealed away. But her pet, Xiang Yu, was never discovered.
As it happened, Xiang Yu had little interest in following Jenova’s footsteps. Certainly, he could’ve found a way to destroy the remaining Cetra and used the Planet’s shattered remnants to find new life to ruin, out among the stars. But that would only take time and effort, whereas in the meantime, there was so much fun to be had.
Nonetheless, as the millennia passed and Shinra came into power, Xiang kept himself reasonably well-hidden. After all, if the humans had discovered him, they might’ve hunted him down with their magic; and though they weren’t as powerful as the Cetra, he wasn’t quite as powerful as Jenova, either. better not to risk it, he decided, when there was plenty of fun to be had in the shadows.
Even when Sephiroth returned to take Jenova’s body and was subsequentyl defeated, Xiang had little interest in it. Either Sephiroth would fail and Xiang would return to his life as normal; or Sephiroth would succeed and Xiang would hitch a ride with him on whatever was left on the Planet. The Promised Land, too, held little interest for him. The first time Xiang truly found himself in the spotlight was during the spread of Geostigma.
Xiang’s unique biology didn’t exactly take well to Geostigma, but rather than slowly yet inevitably killing him, Xiang began to... mutate. It wasn't long before this caught the attention of AVALANCHE’s members, but Xiang slipped their attention as Sephiroth’s Remnants prepared for their Reunion.
Only afterwards did Cloud and the rest of AVALANCHE try to hunt down Xiang, but he proved surprisingly difficult to track down...