The merger of BHP and Rio's iron ore operations in Australia "goes against fair competition principles" and Beijing should use anti-monopoly measures to stop the deal, the China Iron and Steel Association (CISA) said in a statement.

"The CISA firmly opposes" the deal which "will certainly cause irrational price rises" said the statement posted on csteelnews.com, a website owned by CISA.

"China is the world's largest iron ore consumer and importer. Anti-monopoly authorities in China should firmly resist the Rio-BHP tie-up plan according to the anti-monopoly law to protect the interests of Chinese steel firms."

BHP and Rio, the world's two biggest miners, signed a binding agreement this month on the deal to combine their vast Western Australian iron ore operations with expected savings of about 10 billion dollars.

The joint venture was announced by Rio in June, along with a 15.2 billion dollar rights issue, as it called off a huge cash injection from Chinese state firm Chinalco.

Rio's relations with China were tainted by the arrest in July of three of its employees, including Australian passport-holder Stern Hu, over alleged industrial espionage in Shanghai.

The detention of Hu, Rio Tinto's lead negotiator on iron ore prices in Shanghai, has raised diplomatic concerns between Australia and key market China and sent a sobering message to the business community.

In a bid to gather support for a campaign opposing the Anglo-Australian miners' tie-up, the CISA sent a delegation to Brazil last week seeking closer ties with Vale, the world's top iron producer, earlier media reports said.

Submissions had been made to both the Australian Competition and Consumer Commission and the European Commission regarding the deal, said BHP and Rio previously, adding the EU authorities were already investigating it.

China holds US citizen on trade secrets charge: embassy
Beijing (AFP) Dec 17, 2009 - Chinese authorities have held a US engineer for more than a year on charges of violating trade secrets, the US embassy said Thursday, in another case of a foreigner detained over a commercial dispute.

Hu Zhicheng, a Chinese-born US national, is being held in a group cell in a detention centre in the northern coastal city of Tianjin, an embassy spokesman, Nick Snyder, told AFP.

"Mr Hu's case is still under investigation with the Public Security Bureau (PSB) but should be returned to the prosecutor's office," Snyder said in an email, adding the case had not yet gone to trial.

Joshua Rosenzweig, a senior researcher at the Dui Hua Foundation, which has worked on the case, said Hu was being held over a "commercial dispute involving a technology patent, and there seems to be a dispute over ownership of that.

"In China, this kind of situation where commercial disputes end up involving law enforcement is not uncommon," he said.

This is the third such case to have come to light in China in the past six months.

Xue Feng, another China-born US citizen, has been held in the Asian nation for over two years on state secrets charges, and Australian national Stern Hu was arrested in Shanghai in July, accused of industrial espionage and bribery.

Snyder said Hu Zhicheng -- initially detained on November 29 last year -- was not allowed direct written contact with his wife, who lives in California, as she was also considered a suspect in the case.

"Letters that come to him are generally from his children but have references to the wife crossed out," he said, adding US consular officials had visited Hu nine times.

"A Bible was not accepted last week by the PSB. The US Embassy has protested the denial and sent a formal request to the Chinese government to have this delivered the next time we see him."

Rosenzweig said trade secrets charges in China generally resulted in sentences of up to three years in prison. Xue, however, faces a longer sentence.

"A trial hearing was held Friday for Xue, and the prosecution introduced some new evidence," he said, adding the court would have to pass judgment within about one month.

A report earlier this month on Boxun.com, an edgy news website that engages in citizen journalism, said Hu graduated in chemical engineering in eastern China, and had studied in Japan and at MIT in the United States.

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