The problem isn't the fonts. It's simply a matter of the applications not knowing which encoding to use.
The xinitrc file that you found is the default one that is used when no .xinitrc is present in the user's home directory. In your setup, all it does is start /etc/X11/Xsession.
Do you have a .xsession in your home directory? If you don't, copy the /etc/X11/Xsession to .xsession in your home directory. The changes should probably made in this file. Could you post the contents of this file?