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It could have been the handset that took on Apple and Google.

Mark Zuckerberg and Xiaomi Inc CEO Lei Jun discussed a potential investment by Facebook in China's top smartphone maker ahead of its $1.1 billion fundraising last month, it has been revealed.

The firm has been dubbed the 'Apple of China' - and enraged Apple who believe the firm simply copies their work.  

Xiaomi has enjoyed success with smartphones like the Mi-2A and Mi-2S after it was founded by Lei Jun (above) four years ago although the company has drawn criticism for copying some of Apple's products

The Chinese smartphone manufacturer recently became the most successful tech start-up in the world after being valued at $45 billion (£29 billion).

However, a deal never materialized, several people with knowledge of the matter told Reuters.

The discussions, at a private dinner when Zuckerberg visited Beijing in October, were never formalized, three of those people said, as the two CEOs weighed the political and commercial implications of Facebook - which has been banned in China since 2009 - buying into the Chinese tech star now valued at $45 billion.

One individual with direct knowledge of Xiaomi's fundraising said the mooted Facebook investment was 'not huge,' but the talks underscore how ties between U.S. and Chinese companies have deepened as China's tech industry matures.

A Facebook investment in Xiaomi would have raised the international profile of the popular handset maker dubbed 'China's Apple' by its fans and linked it to a U.S. social networking phenomenon with more than 1.3 billion users.

Facebook, for its part, has long harbored ambitions to expand into the world's most populous country, potentially with partners. One of the individuals said Facebook and Xiaomi began discussing a possible investment in mid-2014.

Xiaomi's Lei was partly put off by the potential for political fallout at home of selling a stake to Facebook while the U.S. social network is still banned in China, two of the people said, adding Xiaomi also feared a tie-up with Facebook could threaten its relationship with Google Inc, a crucial business partner. 

Xiaomi's phones are built on Google's Android operating system.

Zuckerberg has eyed China as a critical piece of his vision to connect the global population.

Xiaomi ultimately announced last month it raised $1.1 billion from investors including Hong Kong-based tech fund All Stars Investment; DST Global, a private equity firm that has invested in Facebook and Alibaba Group; Singapore sovereign wealth fund GIC; Chinese fund Hopu Management; and Alibaba founder Jack Ma's Yunfeng Capital.

The fundraising valued Beijing-based Xiaomi at $45 billion just three years after it sold its first smartphone. 

The company had revenue of close to $12 billion in 2014.

SIR JONATHAN IVE ON XIAOMI 

Similarities in the design of Xiaomi's products and those of Apple have earned the company the unofficial title as 'the Apple of China'. 

It even produces a MiTV similar to AppleTV and its own version of Apple's iCloud called MiCloud.

Executives at Apple, which is valued at around $651.5 billion (£418.6 billion), have reacted badly to these, with its vice president of design SirJonathan Ive effectively accusing Xiaomi of theft. 

Apple's head of design hit out Xiaomi at the recent Vanity Fair New Estalishment Summit in San Francisco. 

Asked what he felt about the company being described as the 'Apple of China', Sir Jonathan Ive criticised them for copying his company's designs.

'I don't see it as flattery,' he said, 'I actually see it as theft.' 

Sir Jonathan said seeing knockoff designs made him think of the lengthy development cycle that went into producing the originals.

He said: 'When you're doing something for the first time, for example with the phone, and you don't know it's going to work, and you spend seven or eight years working on something, and then it's copied — I have to be honest, the first thing I think isn't 'ooh, that was flattering'.

'All those weekends I could have had at home with my lovely family but didn't, but the flattery made up for it.'

However, Xiaomi's global vice president Hugo Barra said such accusations were 'sensationalist'.

He told the Verge: 'If you have two similarly skilled designers, it makes sense that they would reach the same conclusion.' 

Zuckerberg has eyed China as a critical piece of his vision to connect the global population. But, like Google and Twitter, the social networking giant has been blocked by China's internet censors, who cite national security concerns.

'Facebook wants to get into China, and Xiaomi is keen to expand outside, so they both recognize the importance of working together,' said one of the knowledgeable individuals, none of whom wanted to be named due to the sensitivity of the matter.

Xiaomi and Facebook declined to comment for this article.

The two CEOs knew each other previously and deepened their relationship last year. In October, Zuckerberg was invited for dinner at Lei's Beijing home along with Facebookbusiness development chief John Lagerling and China head Vaughan Smith.

The next day, Zuckerberg, whose wife is Chinese-American, addressed the prestigious Tsinghua University and won plaudits for speaking in Mandarin during a 30-minute Q&A session.

The Xiaomi Miui 6 handset, which many have said is simply a copy of the iPhone 5S and uses its own apps, has helped turn Xiaomi into the third biggest smartphone producer in the world behind Apple and Samsung

As Xiaomi sought financing last year, ICONIQ Capital, a San Francisco-based fund that manages several individuals' personal wealth, including Zuckerberg's, also considered buying shares, but ultimately did not, several people with knowledge of the matter said. Talks about ICONIQ taking part in Xiaomi's financing were not led by Zuckerberg himself. 

Xiaomi is China's biggest smartphone maker, according to some industry analysts, and trails only Samsung Electronics and Apple in global market share.

A strategic partnership with Xiaomi would give Facebook another avenue to distribute its apps and potentially provide a powerful ally in its bid to overturn its China ban.

Xiaomi Redmi phones have been the company's best selling products in China, Singapore, Taiwan and India

For Xiaomi, access to Facebook's vast banks of user data would be valuable as it seeks to grow into a global internet company providing comprehensive online services.

But Lei thought it would be 'too sensitive' to sell an equity stake to Facebook given its uncertain political status in China, said one of the people with knowledge of the matter.

China's top internet censor, Lu Wei, has warned that social media, particularly foreign services, could be a destabilizing force for Chinese society. Lu, however, visited Facebook's U.S. headquarters last month, prompting speculation that relations between Facebook and China's government were warming.