Stern Hu and three Chinese staff, whose trial on allegations of bribery and and stealing trade secrets opened Monday, have pleaded guilty to taking money, defence lawyers say, but have contested several aspects of the charges.

The case is widely seen as a test of the rule of law in China and has raised concerns about the potential pitfalls of foreign companies doing business in the world's third-largest economy.

China insisted Tuesday that the high-profile case was being handled in a accordance with the law and that it was communicating with Australia, a key trade partner which is a major source of resources for its booming economy.

Hearings on Monday and Tuesday morning at the Shanghai court were dedicated to the bribery case but moved into a closed-door session in the afternoon, adding to questions about whether the men would get a fair trial.

"The court declared that was the end of the proceedings related to bribery charges and that the session this afternoon would be related to the commercial secrets charges," said Australia's consul general in Shanghai, Tom Connor.

Hu, the head of the Anglo-Australian company's Shanghai office, and the other employees -- Wang Yong, Liu Caikui and Ge Minqiang -- have been in detention since July last year but were charged only last month.

Wang's lawyer Zhang Peihong said all four had pleaded guilty to bribery charges, but there had been "intense debates in the court" about the amounts of money involved.

"For my client, there have been disputes about whether charges involving several million dollars are justified," he said. Wang stands accused of taking 75 million yuan (11 million dollars) in bribes.

Australia's government has said Hu "made some admissions," but said it would make no further comment until the proceedings end on Wednesday.

Under Chinese law, the toughest sentence for non-government officials convicted of accepting bribes is 15 years in prison, Zhang said.

Access to the trial at the Shanghai No 1 Intermediate People's Court has been restricted since it opened and only a handful of reporters from state-run domestic media have been allowed inside.

Tuesday's afternoon session was closed to Australian diplomats, Connor said, but Canberra has asked China to consider opening the hearings.

Zhang said he could not discuss what happened in the closed session.

Connor told reporters outside the court that the defendants had been given an opportunity to respond personally to the bribery charges in the morning, but that Hu made no comment.

Liu's attorney Tao Wuping said Hu and his client had pleaded guilty on Monday.

Hu has been charged with accepting a total of around six million yuan (880,000 dollars) in bribes, according to Tao and the Australian government.

Tao told AFP that Liu faced a charge of accepting three million yuan in bribes, while Ge was charged with accepting bribes of six million yuan.

The four were arrested during contentious iron ore contract talks which later collapsed, and after Rio snubbed a near 20-billion-dollar cash injection from its largest shareholder, the state-run Chinese miner Chinalco.

Tao told Dow Jones Newswires that the admissions were not part of any deal with prosecutors. He also said that Chinese steel company executives had paid the bribes.

Zhang declined to comment on who paid the bribes, saying that information was part of the closed proceedings.

Rio, the world's third-biggest miner, has previously said it was not aware of any wrongdoing by its employees.

"China's judicial authorities are handling the case in accordance with the law, legal procedures and the Sino-Australian consular agreement," Chinese foreign ministry spokesman Qin Gang told reporters.

"China and Australia have stayed in communication on this issue and China has given timely information on the case."

The head of Rio Tinto's iron ore division, Sam Walsh, told Dow Jones that the company would "respect the outcome" of the trial, but declined further comment.

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