You may remember back in October of 2014, Facebook's Mark Zuckerberg made the headlines when he visited China and engaged in a Q&A with the audience. This mainly hit the headlines as during the Q&A Zuckerberg answered and conversed in Mandarin. Well, a report from Reuters today claims that this was on the back of a rather interesting meeting Zuckerberg had the night before with Xiaomi's Lei Jun. According to the report, the two had talked the night before over dinner about the possibility of Facebook investing in Xiaomi. Although, according to unnamed sources "with knowledge of the matter," the deal never progressed beyond the initial dinner conversation.
It seems rather obvious as to why the conversation never materialized into action when you consider the turbulent relationship between Facebook and China. Facebook has for a number of years been banned in China and as such it is claimed this was the big stumbling block over the idea of a Facebook backed investment. The two CEOs were noted as debating the political and commercial implications of such a deal. The report also does go on to suggest that (again according to one of the sources) that the deal on the table was not particularly huge in terms of money, although the talking between the two companies is symbolic enough of the current state of affairs in the tech world. According to the report, Xiaomi's Jun was particularly worried about the implications of such a deal both at home and abroad. Jun feared that in China there may be implications of allowing investment from a Chinese banned company, while was also concerned this may cause tensions abroad with its relationship with Google.
It is not surprising that both companies would want such talks to progress as they both would gain from such an agreement. Xiaomi would benefit in the US market from being associated with Facebook and would likely increase their branding presence in the market which they have yet to fully establish themselves. Likewise, with the already mentioned banning of Facebook in China, such a deal may have helped to build ties with an influential Chinese company. Whether such a relationship could help Facebook and their China problem is another story though. That said, such an investment would not hurt to try. However, as the report suggests, the deal never progressed any further. Not that it mattered too much to Xiaomi, who went on to secure over $1 billion in funding in December.