Finau entered Sunday at Sheshan International Golf Club with a three-shot lead but Schauffele carded the lowest round of the day with a 68 to reel him in and the duo were locked together at 14 under after 72 holes.
Schauffele found the green in two on the first trip back up the last and with Finau having to lay up after finding a bunker off the tee, a birdie was enough to hand Schauffele the victory.
Defending champion Justin Rose was right in it throughout the day but had to settle for a 72 after a bogey on the last to finish four shots out of the play-off at ten under.
Thai Kiradech Aphibarnrat and American Andrew Putnam were then at eight under, a shot clear of another American in Keegan Bradley.
Schauffele’s victory comes in just his 14th European Tour event and moves the Affiliate Member up to fourth in the Race to Dubai Rankings presented by Rolex after top ten finishes at the US Open and Open Championship.
“I felt like I was playing great all day,” he said. “We kept our heads down. Even when I was signing my card I was like, ‘oh, wow, I actually went birdie-birdie to get in the play-off’. I was just in my own world out there.
“It means a lot, it was my birthday this week. To have my family out here, especially with the win, it’s really special.”
Finau missed from inside five feet on the first but recovered beautifully, getting on the green at the par five second in two to make a birdie. Rose and Schauffele both found sand with their second shots on the same hole but played excellent bunker shots to make birdies.
Schauffele failed to get up and down from sand on the fourth but bounced straight back with a 16-foot right-to-lefter on the next, although it was Rose who cut the lead to one, holing a ten-foot putt on the seventh.
Finau found the hazard with his second on the eighth while Rose found trouble off the tee and both men did well to make par, leaving the door open to Schauffele who made a routine birdie on the par five.
Rose could not repeat his heroics at the next after finding the cart path off the tee and he was two behind at the turn.
Finau put his approach to the tenth to two feet to open up a two-shot lead and when Rose saw a chip roll back to his feet for a second consecutive bogey, he was four back.
Finau found a nasty lie off the tee on the 11th and put his second in the sand, with a clumsy chip after missing the green on the next making it back-to-back bogeys and handing Schauffele a share of the lead.
The 25 year old put his approach to a couple of feet on the 13th to lead on his own but Finau hit back from seven feet on the 14th, with Rose making back-to-back six-footers to sit a single shot back.
Finau made a par on the 15th but that was enough to put him back in front as Schauffele three-putted and Rose failed to get up and down from a bunker.
Schauffele recovered from 12 feet on the 17th to rejoin the lead heading to the last and he and Finau both made birdies on the par five, with Rose putting his third in the water for a bogey.
“I definitely feel like I let one get away,” said Finau. “Xander played incredible golf today. It was playing tough out there. He posted a number and made birdie on a play-off hole when it counted. Hats off him to, he played nicely today and deserved to win.
“It seemed like we separated ourselves with nine holes to play. Kind of a three-man tournament – definitely felt that way coming down the stretch – and it was cool to have a chance to win, a real chance to win. I’ll definitely learn from this and keep moving forward.”
Aphibarnrat made five birdies and four bogeys in a 71 to seal his third top five in a World Golf Championships event this season, while Putnam and Bradley both signed for rounds of 72.
Tommy Fleetwood, Thorbjørn Olesen, Patrick Reed and Patrick Cantlay completed the top ten at five under.
Belgian Thomas Pieters made the first ever hole-in-one at the 12th hole at Sheshan as his six iron off the tee from 197 yards took two bounces and rolled into the cup.