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China Rio Tinto case takes numerous turns

China's Rio probe could last two months: lawyer
China could wrap up its investigation of four Rio Tinto employees suspected of industrial espionage and bribery, including an Australian national, in two months, one of their lawyers said Wednesday. China said last week it had formally arrested four Shanghai-based Rio staff, including Australian passport-holder Stern Hu, over accusations of bribery and stealing commercial secrets. Hu and his Chinese colleagues Liu Caikui, Ge Minqiang and Wang Yong were originally detained on July 5 amid difficult negotiations between Rio and Chinese mills on iron ore prices. Their detention had put some strain on relations between resource-rich Australia and China, the world's biggest iron ore consumer. "Under Chinese criminal law, the investigation could last two months, but the police may wrap it up earlier than that," Shanghai-based lawyer Zhai Jian, who represents Ge, told AFP when asked when prosecutors would move forward. Charges against the four Rio staff have been downgraded from more serious allegations involving "state secrets" to suspicion of obtaining commercial secrets through "improper means" and bribery. Zhai, who visited his client for the first time on Tuesday, said Ge looked "all well". His colleague Zhang Peihong, who will represent Wang, saw his client the same day. Zhang, as well as the lawyers reportedly representing Hu and Liu, were not immediately available for comment. (AFP Report)
by Staff Writers
Beijing (UPI) Aug 20, 2009
Going by all the developments since China's huge deal with the Anglo-Australian mining conglomerate Rio Tinto fell through and Beijing's subsequent detention of four company employees, it appears the Communist economic giant will not let anything interfere when an attractive international deal is to be made to satisfy its enormous appetite for resources.

Developments especially in the past few days saw China come up with one surprise after another in trade dealings with Australia, the main supplier of raw materials for its steel and other infrastructure industries, even though the July detention of Rio Tinto's iron ore employees on unexplained espionage accusations had strained bilateral relations.

In the latest development, PetroChina, the country's largest energy company, on Tuesday agreed to buy liquefied natural gas from Australia under a 20-year deal valued at more than $40 billion. The gas will come from ExxonMobil's Gorgon field off the coast of Western Australia.

This largest ever trade deal between the two countries came even though China has not relented in its opposition to Australia granting a visa to Rebiya Kadeer, whose Muslim Uighur group was blamed by China for masterminded the deadly July 5 ethnic riots between Uighurs and Han Chinese in the northwest Xinjiang-Uighur region.

In the Rio Tinto case, China's detention of the employees including its manger came a month after a $19 billion bid by China's state-owned Chinalco aluminum group for a stake in Rio Tinto collapsed.

But as the issue began raising international concerns about the risks of doing business with China, the government earlier this month formally arrested them on charges of suspicion of obtaining commercial secrets and bribery, a lesser charge than the earlier accusation of stealing state secrets.

Rio Tinto officials again insisted they had acted properly and ethically in their business dealings in China. In any case, the official charges raised the possibility the employees' cases would now be dealt with as routine criminal ones instead of the more onerous espionage ones that could even result in death sentences.

"If China's intention was to send a message to the international business community, it was hugely successful. Many multinational companies became fearful that they, too, could become targets in similar state secrets cases," the Korea Times wrote.

Prior to the formal charge, there appeared a strange report on a Web site linked to China's state secrets bureau alleging Rio Tinto's commercial spying in China for six years had cost the country $100 billion in iron ore imports.

But two days later the report disappeared from the Web site, which the Times of London said indicated the government was not pleased with the allegations.

Again, at the time of the Rio Tinto employees' detention, Chinese steel mills and Australian miners had been in tough negotiations over iron ore prices. Here again as the unresolved talks continued, China struck a deal this month with Australian miner Fortescue Metals Group in what was seen as a face-saving arrangement, even though the price discount was not as much as China had been demanding and that the deal would only meet a fraction of China's ore needs.

In a lengthy report last week, China's official Xinhua news agency said the arrest of the four employees and the charges filed against them had exposed some multinationals' lack of legal responsibility.

Liu Renwen at the Law Institute of the Chinese Academy of Social Sciences was quoted as saying the case showed that everyone, regardless of nationalities, should abide by the law in China -- even though in the past, some local governments preferentially treated foreign companies in order to attract investment.

Xinhua also quoted Chinese Vice Minister of Commerce Fu Ziying as saying that the Rio Tinto case will not and should not hurt trade and economic ties with Australia. "This is an isolated judicial case," Fu said.

Industry Minister Li Yizhong has said China, as the world's largest importer, should have more say in the global iron ore trade. Official figures show China imported 355.3 million tons of iron ore in the first seven months of this year, up 31.8 percent from last year.

With that kind of demand, it would be difficult to pass up on any attractive deal, political and other considerations notwithstanding.

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Deal shows China-Australia business ties on track: experts
Beijing (AFP) Aug 19, 2009
The massive energy deal signed by China and Australia shows that relations are on track between the Asia-Pacific economic powerhouses despite recent political tensions, analysts said Wednesday. China's biggest oil and gas producer PetroChina ordered 2.25 million tonnes of liquefied natural gas (LNG) a year over 20 years from ExxonMobil's share of Australia's Gorgon plant -- a deal totalling ... read more







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