China to Rudd: Butt out

China has dismissed Australian concerns about the detained Rio Tinto executive Stern Hu as mere "noise" and warned that representations on his behalf will only hurt Australian interests.

The stinging rejection of Australia's protests on behalf of Hu and three other Rio Tinto employees comes as the US Government raised the issue directly with the Chinese leadership, increasing pressure on Australia to do the same.

The Prime Minister, Kevin Rudd, on Wednesday warned China of possible economic consequences over the Hu matter.

"I've noticed that in Australia recently some people have been making noise about this case," said the Ministry of Foreign Affairs spokesman, Qin Gang, at a regular media conference yesterday. "This is an interference in China's judicial sovereignty."

The comments underscore Mr Rudd's political and diplomatic quandary, where publicly raising the matter may backfire in Beijing but failing to raise it may be viewed as being too soft at home.

"It cannot change the objective facts nor can it have influence on the relevant Chinese authorities which are dealing with the case according to our law," Mr Qin said.

Immediately before his defence of China's judicial system, Mr Qin prejudged the case by treating the allegations against Mr Hu and his staff as fact.

"The actions of the Rio Tinto staff have caused losses to China and China's interests," he said. "I believe Stern Hu and Rio Tinto are fully aware of this."

Mr Qin warned Australian advocacy for Mr Hu would backfire.

"We're firmly opposed to anyone deliberately stirring up this matter," he said. "This is not in accordance with the interests of the Australian side."

In Beijing yesterday the US Commerce Secretary, Gary Locke, said he would raise Mr Hu's case with the Chinese Premier, Wen Jiabao.

"This is, of course, a great concern with respect to US investors, multinational companies from around the world that have projects here," said Mr Locke, who is in China with the US Energy Secretary, Steven Chu.

"We need to have transparency, we need to have assurances and confidence that people working for these multinational companies, international companies, American companies, will be treated fairly."

The developments came as the Australian Foreign Minister, Stephen Smith, prepared for a meeting with a relatively junior Chinese official in Egypt.

Mr Smith said there were no immediate plans for a more senior representation from Australia. He suggested this might be against Mr Hu's best interests.

He also conceded the Government had no more information on Mr Hu than what it had gleaned so far from official public statements by the Chinese Government. With the Opposition using the US representation to step up its demand for the Government to take its concerns to the top, Mr Smith continued to urge caution.

In Egypt yesterday Mr Smith was to meet the Chinese Vice-Minister of Foreign Affairs, He Yafei, whom Kevin Rudd met in Italy last week.

After admitting the Government was still largely in the dark, Mr Smith said he would press Mr He for more detail and ask him to treat Mr Hu's case expeditiously.

The Shanghai State Security Bureau has accused Mr Hu of causing economic losses to China by bribing steel executives and stealing state secrets.

Chinese media have raised an array of allegations, including that Rio Tinto may have bribed all of China's top 16 steel mills, but analysts are wary about the veracity of any of the reports.

No evidence has been presented, and the Australian Government, Rio Tinto and Mr Hu's family have been given no information beyond the scant details given at a Ministry of Foreign Ministry news conference a week ago and a brief statement on a Chinese website.

Australian officials speculate that the Chinese action is an attempt to unify iron ore buyers and maximise China's bargaining strength in contract negotiations with the iron ore miners, Rio Tinto, BHP Billiton and Vale.

Mr Qin said that foreign firms should display business ethics when operating in China. "A man with noble characteristics who loves money should make it by honourable means."

- © Fairfax NZ News