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Australia says China stonewalling as 'spy' probe widens

world Updated: Jul 14, 2009 14:34 IST

AFP
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Australia said on Tuesday it was struggling to obtain more information about a mining executive detained in China, as Beijing widened its industrial espionage probe surrounding fraught iron ore talks.

Foreign Minister Stephen Smith warned Australia would remain involved in the case of Rio Tinto executive Stern Hu for the "long haul" after a third meeting with China's acting ambassador failed to yield further details.

"No, and that's why we pressed them both in Canberra and in Beijing," Smith told public broadcaster ABC, when asked if more information had been provided during Monday's talks.

"But I've made the point in recent days, despite some people thinking that somehow this difficult issue can be magically solved by one phone call, this is a difficult and complex case."

Chinese media said five big steel firms were now being investigated in connection with the arrest of Australian passport-holder Hu and three Chinese colleagues by counterespionage agents in Shanghai on July 5.

The China Daily reported that officials from the China Iron and Steel Association, which had been locked in fraught iron ore contract negotiations with Hu, were also being probed.

China has not outlined the allegations against Hu but says it can prove he was involved in bribery during the iron ore talks, accusing him of causing "huge losses" to the country.

Smith said Australia had complained to China about the lack of information after officials were forced to scan government websites and public statements for information about Hu's arrest.

"I've made it crystal-clear as have our officials, that I would have much preferred that this information be given to us through the normal diplomatic channels," Smith said.

"(The case) requires constant attention, which is what we're giving it. It may well see Australia in this matter for the long haul, and we need to take this step by step, in a detailed, methodical, sensible, rational way," he added.

Analysts say Hu's arrest has sent tremors through the international business community and shows the potential risks of doing business with China, the world's third largest economy.

Hu's arrest has also created a political and diplomatic headache for Mandarin-speaking Prime Minister Kevin Rudd, who has made improving relations with Beijing a priority.

Treasurer Wayne Swan denied Australia had taken its dealings with the Asian giant lightly, and rejected calls to raise Hu's case at a higher level.

"I don't think the government has underestimated anything," Swan told reporters.

"We have a consular agreement with them (and) we are dealing with it in a responsible, measured way... these issues are not resolved through megaphone diplomacy."

The arrests come just weeks after Anglo-Australian mining giant Rio Tinto snubbed a massive cash injection from a Chinese state-owned company, prompting angry comments in official media.

The developments have cast a shadow over a vital trade relationship for resource-rich Australia, whose dealings with China were worth 58 billion US dollars in 2008.