Just to give you an example of what other phone companies do, we looked at Samsung's privacy policy. Samsung too has a privacy policy that looks very similar to what Xiaomi has stated. It's clear that most companies work in a similar fashion and it does not directly indicate that your personal information will be used for illicit means. What is concerning is the possibility of your information being used by third-party companies in a manner similar to what Cambridge Analytica, which scooped Facebook data from a rogue app, has done.
Ideally, companies should not be collecting this much information. But of late, it is also true that collecting a lot of information about users -- personally identifiable as well as anonymised data -- has become an industry practice. So in this way Xiaomi is neither good nor bad. It probably follows the same practices that others do.
