/ 18 March 2010

Australia tells China: World is watching Rio Tinto case

Australian Prime Minister Kevin Rudd on Thursday warned China that the “world will be watching” next week’s trial of a Rio Tinto mining executive, as diplomatic officials urged Beijing to let them attend.

Rudd’s comments are likely to increase pressure on China over the highly sensitive trial of Stern Hu and three Chinese colleagues, which will take place partly behind closed doors in Shanghai from Monday.

“The world will be watching how this particular court case is conducted,” Rudd told reporters.

Deputy Prime Minister Julia Gillard expressed disappointment that much of the three-day trial, which centres on alleged bribery and industrial espionage during fractious iron-ore negotiations, would be closed.

“We are obviously very disappointed that that court will not be conducted in an open fashion and representations are being made to the Chinese government about that matter,” she said.

Hu, an Australian citizen, was arrested along with colleagues Wang Yong, Ge Minqiang and Liu Caikui in Shanghai in July during high-stakes and ultimately unsuccessful negotiations to set annual iron-ore prices.

The arrests, just weeks after Rio snubbed a major cash injection from a state-owned Chinese firm, badly tarnished Australia’s ties with its biggest trading partner and sent shivers through China’s foreign business community.

Foreign Minister Stephen Smith said he hoped Australian officials would be able to attend the trial under a consular agreement with China.

“The consular agreement opens the prospect of our officials being present in the court for the commercial confidentiality charge,” Smith told reporters.

“We have raised this matter with the Chinese authorities, asking for it to be reconsidered.”

Analysts said the case represents a dilemma for Australia, which has relied heavily on Chinese demand for its raw materials as it became the only Western country to avoid recession during the global financial crisis.

It also takes place against the backdrop of more tensions over iron ore, after China ignored Australia’s request to stay out of this year’s negotiations and vowed to support steelmakers in their pricing dispute with top miners.

David Martin Jones, an Asia-Pacific international relations expert from Queensland University, said Australia was trying to look tough without provoking China or endangering the trading relationship.

“They’re displaying a certain amount of pressure but there’s a reluctance to alienate China too much by taking too tough a line on it,” he said.

“I think they’re hoping for a result with Stern Hu that will not lead to too harsh a punishment. I think the style probably isn’t to push it too hard, whilst at the same time saying the world is watching.

“But given the way the Chinese have been responding to other political pressures, that the world is watching will not be too much of a worry for them.” — AFP