 After Li Shimin destroyed a major rival, Wang Shichong the Emperor of Zheng, in 621, Xiao, who served under Li Shimin during the campaign and was credited with some of the strategies (as well as charged with collecting the Sui imperial treasury stores at the Zheng capital Luoyang), was given 2,000 additional households as part of his fief and made one of the deputy heads of the important executive bureau of government (尚書省, "Shangshu Sheng"), "Shangshu Pushe", still considered a chancellor position.As "Shangshu Pushe", Xiao was considered diligent but biased, as well as harsh, and he did not have as good of a reputation.In 626, when Fu Yi () the director of the imperial astronomical observatory, a Confucian, submitted a proposal to ban Buddhism on the grounds that Buddhism was leading to corruption and abuses within the government, Xiao, as a devout Buddhist, debated with Fu earnestly before Emperor Gaozu.