Xiaomi, and Communist Party Influence on Its Business

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August 19, 2014 by ...

Right now, Chinese chatter revolves around Xiaomi’s quality concerns, corporate arrogance and security fears. Being from China, the locals are all too aware the power the party wields. Chinese have commented on the freedom people from deomcratic countries enjoy. They bemoan the truism that in the west anything that is not expressly forbidden is permissible while in China anything that is not expressly permitted is forbidden.

Although at times it raises the hackles of the business crowd to discuss the role of communism in Chinese business, it must be done. Anything else is disingenuous. The Chinese realize this and that is why security concerns crop up when talking about Xiaomi.

Xiaomi phones were covertly copying user data servers in Beijing. After being detected, they fumbled the ball and then said they would fix the problem. Although the followup was weak, it at least showed a measure of respect for the issue. But by then the damage had been done. Xiaomi had trampled on their trust.

Prior to the breach, many Chinese saw Lei Jun and Xiaomi as different, the Apple of China. A rebel who took risks and dared to do his own thing. The security breach proved different.

Swarms of fishermen and Beijing influence
Beijing sends swarms of fishermen into the South China Sea. These men act as tentacles of the party and its power. They swarmed Japanese boats when they approached contested waters, and have done the same with boats from Philippines and Vietnam. These Chinese fishermen are as much advanced security for the party as typical seamen.

In a sense, Chinese electronics companies are the same, fishermen for China. But their catch is user data. Huawei and ZTE would be the most notable examples of this, and Lenovo a close second. Now the Chinese fear Xiaomi is following close behind.

Sadly enough Lei Jun will be throttled by Beijing if he does not submit willingly. The communist party rules with an iron fist, especially right now. This means that LJ and company can play ball or be given the swift kick.

Of course Chinese should not worry about Xiaomi too much, they are just doing what all other Chinese firms do. By the way, did you hear Apple is locating its servers in China now to….

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2 thoughts on “Xiaomi, and Communist Party Influence on Its Business

  1. […] however. This is a bugaboo Chinese firms must deal with due to the nature of communism and how it asserts control over business here in China. Whether they want to or not, Chinese firms must collect data and proffer it up to […]

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  2. […] the cell phone front, communism is well represented with Huawei the ‘old hat‘ and Xiaomi the ‘young turk’. Huawei is an ultra secret company run by an ex-communist party member […]

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