Facebook founder Mark Zuckerberg and Xiaomi CEO Lei Jun discussed the possibility of the social media giant investing in the smartphone maker in October, but nothing substantial came of it, Reuters has reported.
“Facebook wants to get into China, and Xiaomi is keen to expand outside, so they both recognise the importance of working together,” a source said, although the figure discussed was said to be “not huge”.
The dinner in Beijing where the talks took place was held ahead of Xiaomi’s round of funding in which it raised $1.1 billion, which it claims values the firm at $45 billion. Last week, the company reported a 135% increase in sales in 2014 to $12.1 billion.
Facebook, along with Google and Twitter, is currently banned in China and Lei may have been worried about the political fallout that would result from such a deal.
Another concern could be how an agreement with Facebook would impact Xiaomi’s relations with Google, on whose operating system its phones are made.
However, Xiaomi could benefit from access to Facebook’s user data which would allow it to grow and provide comprehensive online services.
As for Facebook, a deal would give it a new channel to distribute its apps and Xiaomi could prove to be a key ally in trying to overturn the ban in a country with a population of around 1.35 billion.
While politician Lu Wei, China’s top internet censor, has maintained that social media is a destabilising force, he visited Facebook headquarters in the US last month, which has sparked speculation that Facebook’s relations with the Chinese government could be taking a turn for the better.