Lei Jun, founder and CEO of China's mobile company Xiaomi, shows new features at launch ceremony of Xiaomi Phone 4 in Beijing
Lei Jun, founder and CEO of China's mobile company Xiaomi, shows the new features at a launch ceremony of Xiaomi Phone 4, in Beijing, July 22, 2014. China's Xiaomi unveiled on Tuesday its new flagship Mi 4 smartphone, aimed squarely at the premium handset market dominated by Apple Inc and Samsung Electronics Co Ltd. REUTERS

Reuters reports that the alleged meeting with Xiaomi's CEO happened in a private dinner during Zuckerberg's visit to China last year. However, the business negotiations among the two never transpired and sources say that the result of their business talk was due to some factors that the two company giant heads had to consider.

Sources say that Lei became indecisive of the investment that was presented by Facebook's main man due to political concerns for the Chinese company which is starting to be a powerhouse in China. It is possible that the smartphone-maker wants to avoid any possible issues with the local government. It is also a known fact that the U.S. based social media network has been banned in China. However, sources also point out that Zuckerberg has high hopes that Facebook will be able to re-enter the world's most populated country.

Additionally, the possible tie-up between Xiaomi and Facebook might also affect the former's relationship with Google which is a powerful partner. Xiaomi's flagship devices and all of its smartphones are all depending on Android as its only platform.

CNET reports that the said investment is not too aggressive , but it aims to provide wider international exposure for Xiaomi which has expressed its international goals. Currently, the Chinese company is the world's third biggest smartphone manufacturer which has established very good markets in China, Indonesia and India.The report adds that Xiaomi has recently secured US$1.1 billion in capital funding and having US$45 billion valuation as a company.

The potential deal between the two companies could be mutually beneficial as both aim to expand. Xiaomi may have rejected a small investment offer from Facebook, though it's unclear exactly why. Both companies refuse to comment on the issue.

Finally, Xiaomi will be launching its new flagship device in Beijing this week. Facebook on the other hand, has been heard to be on the lookout against violent videos that will be posted on the giant social media site.

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