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By Jonathan Chow
The mysterious detainment of four employees from Ozzie mining giant Rio Tinto on Sunday was finally explained today, when the Chinese government confirmed today that Stern Hu, GM of Rio Tinto's Shanghai office, and three of his underlings were alleged to have committed espionage and stolen state secrets.
Chinese foreign ministry spokesman Qin Gang told the press that the country already had “a vast amount of irrefutable evidence” against the arrested staff to prove that they have “pried and stole state secrets from overseas, gravely harming China's economic interest and security.”
But even as the official explanation is meted out and Qin Gang insists that the case is an individual one that “should not be exaggerated or even politicized,” it seems that there is something not being said hovering just below the depths.
As the Wall Street Journal points out, “state secrets” is a pretty broad term in China:
Just about any information can be classified as a state secret in China, and even information that is publicly circulated can be withdrawn or later determined to be a “state secret” based on the consequences of disclosure (of relevance to the Rio Tinto case, harming the economic interests of the state and weakening the economic strength of the state are specifically mentioned as possible rationales for retroactive classification of state secrets). Sending information overseas can also carry heavier consequences. One notable instance of this involved the Uighur activist Rebiya Kadeer, who was sentenced to eight years in prison in 2000 for sending Chinese newspaper clippings to her husband in the U.S.State secrets cases are also subject to less transparency and fewer procedural protections for defendants. Evidence in state secret cases is considered confidential and trials are conducted behind closed doors. In some cases, the defendant’s access to counsel may be limited.
Thickening the plot, a senior executive named Tan Yixin of Chinese steel maker Shougang Corp. was detained for “business crimes relating to the trading of raw materials” today. While it's unclear whether his arrest (he was taken on his way to work by five or six police vehicles) has anything to do with Stern Hu's, the detainment of two high end executives for two major companies in the same industry in the same week is a heckuva coincidence.
It doesn't help suspicions that Rio Tinto is the second largest producer of one of Australia's primary exports (iron ore) and has been at the center of a rising tension in China-Australia relations. Last month, the mega company backed out of a $19.5 billion USD agreement with Chinalco, a Chinese state owned enterprise, instead cutting a deal with BHP Billiton. China and its media mouthpiece was not pleased.
And according to Reuters, “Chinese and foreign business people have been detained or kidnapped during the course of business disputes as a pressure tactic before. Mainland Chinese who have taken foreign citizenship, like Stern Hu, are particularly vulnerable.
Certain Australian conservatives have already connected the dots, calling BS on Qin Gang's remarks that this isn't "political." The Australian consulate has demanded and only just finally gotten access to Hu.
We guess only time will tell whether Hu is just a pawn in the murky semi-business, semi-political game China plays with all multinational corporations, but whatever happens, it's a stark reminder of the dangers you can sometimes face dealing with the Eastern giant.
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Red faced from a botched purchase by your state owned company? Trump up some "State Secret" charges against those that pissed you off. Easier yet if the head rep, though a foreign national, is an ethnic Han (would have been a little more prickly had he been whitey). Chinese are great at treating their own like shit even though in light of the recent strife out west, there is an alleged newfound "Han Pride".
Shanghai sure knows how to shore up confidence in its "rise" as an Asian financial center.
Oh wait...I forgot to add an "LOL!" to the end of one of the sentences here...feel free to insert one where appropriate.
I have been detained before at a remote place in Jiangsu province, because of a commercial dispute. It is a rather sobering experience, if you had any confidence in the universal application of common law.
If sending newspaper clippings abroad can constitute a spying offense under current law, all foreign companies/offices in China would be in breach of the law.
There are other countries where this kind of thing would be conceivable, like Iran, Russia, North Korea, but I am not sure if China still wants to be in that league.
There may be a criminal background to this Rio Tinto case, and China will be compelled to disclose relevant details, if it still wants substantial strategic foreign investments, in or out, in the foreseeable future.
A few commentators are suggesting this is a fundamental shift in the State's attitude towards foreign businesses, suggesting that foreign businesspeople have been left alone in the past due to their economic importance, but that now China is more willing to throw its weight around. Time will tell, I guess.
The system is so opaque and the vicissitudes of the CCP so unpredictable that this might have more repercussions than they anticipated for foreign investment. On the other hand, plenty of firms still have their eyes fixed on the filthy lucre they can extract from the country.
In many parts of Asia, the law exists to protect and give legitimacy to those in power. It exists to protect the secrets, corruption and weaknesses of the ruling elite, and Chinese law is developing a direction intended to codify and preserve the position of the CCP, directly and indirectly allowing them to continue to plunder state resources and exploit the people.
The attempted Rio acquisition is more than just about money, China's uranium for civilian nuke reactors comes from Rio mines in Australia and the control freak Han-jobs could not let such a valuable commodity not be under their control.
Especially since they need to keep the uranium in Tibet for nuke warhead production only.
It probably didn't help that this occurred after the CCP got slapped away from buying Unocal, reducing nearby fueld supplies for the PLAN.
Let's see how Comrade Rudd gets Rio out of this without forcing a selloff of Rio, which is what the Chinese want.
You have overlooked a key point, Jonathan. In fact, without it, the thickening plot seems much thinner. China is currently trying to negotiate a lower price for Australian iron ore, and aside from the large size of the Chinese market, they have less leverage because the Japanese, Koreans and Taiwanese have already come to an agreement with the Australians. Whether or not this is related to this case is unknown. It really might not be. But these arrests come at a very very very bad time. Chinalco lost out on the Rio deal. Then Chinese steel makers got in a tizzy over not getting their way on iron prices, and now this.
By arresting foreign nationals for "steel"ing state secrets at this time, the Chinese authorities have put themselves in a bad position. The room is there to interpret this as explicit retaliation unless they very quickly present convincing evidence of their charges that would satisfy the Australians. If they can't do that, then it means that no foreign nationals are safe working in China if their companies have a falling out with the government. And that means that foreign enterprises have a very very large incentive NOT to invest in China. And as foreign investment in China is currently falling, this is not the disincentive China needs to be providing at a time when the illusory recovery is being powered during a time of possible bank lending-induced bubble formations in stocks and property.
It is also not the message the Chinese should be sending when they are looking to acquire resources, which Australia has plenty of, either.
Does this website have anything own? Cut and copy western is just lame. All the earthlings know that Western media are always lying about China, especially WSJ, a deep shit.
Anyhow, I think Rio crossed the line and had to be punished harshly. They are too greedy and faceless, quite typical Aussie.
BTW, this is just targeting the Aussie, if some other foreigner felt insecure, you better check if you did according to China's law.
Does this website have anything own? Cut and copy western is just lame. All the earthlings know that Western media are always lying about China, especially WSJ, a deep shit.
Anyhow, I think Rio crossed the line and had to be punished harshly. They are too greedy and faceless, quite typical Aussie.
BTW, this is just targeting the Aussie, if some other foreigner felt insecure, you better check if you did according to China's law.
So is it innocent until proven guilty then?
@dashan
For your information, this site also regularly copy-and-pastes information from Xinhua and Chinese officials. Check out the link for a good example:
http://shanghaiist.com/2008/03/18/quote_of_the_da_1.php