Going only by the original game’s scripts (I’m working w the English and French translations) my takeaway is that the spiritual part of FF7’s story is meant to contribute to the thematic subject of the environment, the idea being that no part of us is separate from nature, and the cycle of living and dying is a natural process, within which our individual consciousness is but a small (and temporary) part.
Martial arts are not powered by Chi in the original game, the word Chi doesn’t appear. Spirit Energy, Mako, and Lifestream are all seemingly used interchangeably, distinguished only by whether or not you can percieve them, and humans interact with it either by burning it as a fossil fuel or through use of materia.
However, going by Bugenhagen’s orrery scene, the Lifestream seems to grow the more life there is on a planet. So there could be “Chi” (in a sense) flowing into the Lifestream from living souls. But that stuff would have to eventually be used to create new souls. So it’s not Chi in the traditional sense.
To that end, MP could be considered this kind of Chi, as in, a power that a living soul puts out into the world by exerting their will. One could easily headcanon that attuning to materia and expending MP generates Chi, which grows the Lifestream. I may just do that!
The Compilation entries (through to Rebirth) have expanded it so I can’t really keep track of what the official stance on this anymore. I don’t much care though, ahah, the question is more interesting than any answer.