Wednesday July 15, 12:53 PM
Trade ties 'at stake' in China spy row: Australia
By Amy Coopes
SYDNEY (AFP) - Australian Prime Minister Kevin Rudd has warned China it has economic interests at stake in the case of a mining executive held on spy claims, taking a tough new line in the escalating row.
But Beijing insisted trade relations would not be harmed by the incident, as state media claimed the executive's company Rio Tinto (LSE: RIO.L - news) had bribed officials from all 16 of the country's major steel mills.
Rudd said Australia's key trading partner had "significant" business interests on the line in Hu's case and cautioned that foreign governments and international companies were watching developments closely.
"Australia of course has significant economic interests in its relationship with China, but I also want to remind our Chinese friends that China too has significant economic interests at stake in its relationship with Australia and with its other commercial partners around the world," Rudd said.
"A range of foreign governments and corporations will be watching this case with interest and be watching it very closely, and will be drawing their own conclusions as to how it is conducted."
Rudd's strong statement comes 10 days after Rio Tinto's Stern Hu, who has been leading troubled iron ore negotiations, and three Chinese colleagues were arrested by counter-espionage agents in Shanghai.
China has not detailed the allegations against Hu but says it can prove he was involved in bribery during the iron ore talks, equating the offences with spying and stealing state secrets.
Commerce ministry spokesman Yao Jian moved to soothe tensions, saying Hu's case would not harm the vital trade link, which was worth 58 billion US dollars last year.
"China and Australia are very important trading partners and have good co-operation in areas including raw materials, free trade talks and agriculture," Yao told reporters.
"I don't think the Rio Tinto case will affect China's trade environment or foreign investment environment," he added.
Anglo-Australian giant Rio would not comment on the latest bribery claims but repeated it was "committed to high standards in business integrity and takes its ethical responsibilities very seriously."
The incident has cast a shadow over one of Australia's most important trade relationships and created a headache for the Mandarin-speaking Rudd, who has pledged to boost ties with China.
The former diplomat vowed to press for more information on Hu's arrest but said economic interests would not stop Australia speaking out on human rights or "broader questions of China's engagement with the institutions of the world."
"We pursue a broad-based relationship with the Chinese, one where we will pursue all of our interests simultaneously," he said.
"When it comes to prosecuting the interests and supporting the wellbeing of individual Australians abroad, that will be done with full vigour ... without compromise to the interests of a single Australian."
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