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Chinese grant consular access to detained Aus -

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Chinese grant consular access to detained Australian Rio executive

Stephen McDonnell reported this story on Friday, July 10, 2009 12:10:30

PETER CAVE: Chinese authorities have given consular access to the Australian mining executive Stern
Hu. He's been detained by the Chinese authorities accused of spying and stealing state secrets.

Stern Hu is believed to be one of the highest ranking Western executives ever accused of spying on
China. He's head of Rio Tinto's Chinese iron ore business.

The case has sent shock waves through the global mining industry with some analysts suggesting the
detentions may well be payback.

Last month Rio Tinto scrapped plans to accept an investment plan from Chinalco, a Chinese
state-owned company.

Australia's Foreign Minister Stephen Smith who's been in constant communication with consular
officials in China has been releasing details of that consular visit and we'll go to that shortly.

But first we have our Beijing correspondent Stephen McDonell on the line. Stephen, how much
attention is this getting in the Chinese media?

STEPHEN MCDONELL: Well quite a bit of attention. You'd have to say virtually all of the serious
newspapers here are carrying articles on it and also in you know the local electronic media.

But the latest thing which is quite interesting to come out of the Beijing News- or Xin Jing Bao -
they're quoting the Shanghai Municipal State Security Bureau and this is the anti-espionage mob who
arrested Stern Hu and the others last Sunday.

Now they're quoting sources at this bureau and they're saying that the reason for the detention of
Stern Hu and the others is that, and I'll read it out: "In 2009 during the iron ore negotiations on
import and export between China and the other countries, these four people have adopted illegal
measures by roping in and buying off the domestic staff of Chinese iron and steel manufacturing
enterprises, that they spied and stole China's state secrets, and that this has greatly damaged
China's economic security and interests."

So it sounds like they're going to be accusing them of industrial espionage.

PETER CAVE: When are we likely to hear official accusations against Mr Hu?

STEPHEN MCDONELL: Well you know they don't have to actually grant anybody access to the court
system here, especially when it comes to matters of state security so when the hearing is on the
Australian consular officials they'll be given the date, but they'll have to apply to even attend
the hearing.

So it can be conducted very much behind closed doors. I'm assuming though that in the interests of
transparency or at least appearing to be transparent that they're going to have to pass on some of
that information.

But it's kind of a European system here in that a mob called the Supreme People's, and it's a bit
hard to pronounce but Procuratorate, they sort of prosecute the case and then I guess that the
municipal, the Shanghai Municipal State Security Bureau they'll put forward their evidence. And
they're like a sort of beefed up version of ASIO here. And they'll argue why Stern Hu and the
others should go to jail.

PETER CAVE: How much credence would you put on these accusations that what's happened is payback
for the failed Chinalco deal?

STEPHEN MCDONELL: Well it's hard to tell if that could have any or all of a part in determining
this course of action because it is a rather serious thing for China to do and also risks so much
blow back for them that you wonder if they wanted to get back on Rio Tinto that they wouldn't find
another way of doing it.

Because this could really hurt China's interests in terms of trying to get the state-owned
enterprises to invest overseas. So there's so many downsides for them in terms of taking this
course of action.

There is some speculation that maybe one of the reasons they've gone in so hard on Stern Hu and the
others is that well three of them are Chinese passport holders and Stern Hu in certain Chinese eyes
would be considered something of a traitor to China really.

And you know just because he's got a passport from another country that doesn't mean he should be
behaving like this to the motherland and especially when it comes to, you know selling out the
nation's natural resources to a rival country. And maybe that's just playing a part as well.

PETER CAVE: I guess there's also been the suggestion that this has been a very useful diversion for
the Chinese to take attention away from what's going on in Xinjiang?

STEPHEN MCDONELL: Yes I've seen some reports of that, of people suggesting that that could be the

But I reckon there's probably nothing in that and the reason is that they arrested Stern Hu on
Sunday which is before most of this riot had even taken place in Xinjiang. So you know unless they
could look in their crystal ball and see that this is all going to blow up in Xinjiang I doubt that
that's very much the case.

PETER CAVE: Stephen McDonell on the line from Beijing.