Thread: Rio Tinto 'Spies' - What the F***??

What you are cited by Peter Hartcher is an OpEd, nothing more, nothing less (and a very emotional one at that). As I stated before, the Chinese law is put into question and no one is defending it. However, the sky is not falling.

These four are finally charged, on lighter corporate secrets & bribery crimes charges.

China Lightens Up On Rio Tinto

12 Aug [Forbes] Four Rio Tinto employees face lighter than expected charges from China's dictatorship.

HONG KONG -- Four employees of Rio Tinto have been charged by the Chinese government of illegally obtaining corporate secrets and bribery. The four were expected to be charged with violating more serious state secrets laws. Australian citizen Stern Hu, general manager of Rio Tinto's Shanghai office in charge of the iron ore business and three of his Chinese co-workers Liu Caikui, Ge Minqiang and Wang Yong, were held for six weeks before the charges were announced.

Citing a statement of China's Supreme People's Procuratorate, state media Xinhua reported Wednesday that prosecuters found evidence to prove that they were involved in commercial bribery, and investigations have also revealed that there were suspects in China's steel and iron enterprises who were providing commercial secrets for them.

The penalty for stealing business secrets is much lighter than the maximum penalty of stealing state secrets, which could be life imprisonment. Professor Larry Catá Backer of The Dickinson School of Law at Penn State University said it made perfect sense for China to play down Rio Tinto case. “It provides a means of continuing to build a separation between political and economic action. The great fear of other states has been a conflation of state and market activity." ....

Two views from Today's WSJ and NYT.









* August 14, 2009, 2:30 PM ET

In Rio Tinto Bribery Case, China Says ‘The Enemy Is Us’

* Article
* Comments (1)


*

By Jodi Xu

Beijing’s rage over the bribery and stealing commercial secrets charges leveled against four Rio Tinto employees has set off a bout of self-criticism among Chinese businesses and in legal spheres. The conclusion of mainstream media and the country’s top administration? That China has itself to blame.

The latest example of this genre came Thursday, when the state-backed Xinhua news agency quoted a Peking University law professor in a story about the Rio Tinto case as saying that “large companies boasting high levels of ethical standards would likely choose to downgrade their codes of conduct and following ‘hidden rules’ in China.”

The “hidden rules,” in plain words, is commercial bribery, which is rampant because the cost of breaking the law is low enough that some foreign companies prefer taking the risk to bribe, the professor said.

“We need to reflect the roots of the problem,” a columnist wrote Friday in daily business newspaper China Business News. “There are many holes in the legal system from the quality of the law to the enforcement.”

Foreign businesses also have learned that even if they are caught in wrongdoing, they still can make the problem go away with further bribes sprinkled around China’s legal system.

To make the point about the cost of this reality, an article from China’s top secret watchdog National Administration for the Protection of State Secrets this week said “the problem really comes from within.”

The article said greed was the biggest reason many Chinese businessmen made a deal much more expensive then it really should be. Resurrecting an allegation against the Rio four that drew much controversy before China stepped back, the article said that in the Rio Tinto case, bribes resulted in the Chinese steel industry overpaying by $100 billion in purchasing the metal in the past six years.

To put that number in perspective, the article said that is larger than the total annual tax revenue of the four biggest Chinese cities, Beijing, Shanghai, Tianjin and Chongqing, plus Liaoning province. And in a comparison designed to bring the scandal home to the Chinese people, the article said that this means each Chinese citizen effectively paid $70 to the Australian miner and to the corrupted Chinese counterparts.

The Rio Tinto case should serve as a red flag, a columnist wrote in Chinese Business News, adding that it is time for China to draw a clear line in its business ethics and beef up business laws to put such behavior to an end.

In Rio Tinto Bribery Case, China Says ‘The Enemy Is Us’ - Deal Journal - WSJ









August 14, 2009
China Warms to New Credo: Business First
By MICHAEL WINES
http://www.nytimes.com/2009/08/14/wo...gewanted=print


BEIJING — So far this week, the World Trade Organization has rebuffed China in an important case involving Chinese restrictions on imported books and movies. The Chinese government dropped explosive espionage charges against executives of a foreign mining giant, the Anglo-Australian Rio Tinto, after a global corporate outcry. And on Thursday, the government said it had backed off another contentious plan to install censorship software on all new computers sold here.

Throughout its long economic boom, China has usually managed to separate its aggressive push into the global business arena from domestic politics, which remained tightly controlled by the Communist Party. But events this week raise the question of just how long it will be before the two meet.

In each of those matters, politics and business collided, and business won. Business does not always win, and when it does, as in these cases, the reasons are as often as not a matter of guesswork. But in at least some high-profile matters, China appears to be facing the reality that the outside business world can be freewheeling and defiant when its profits are threatened. And so China’s authoritarian system may also have to evolve in ways its top leaders may not readily endorse.

Beijing has a global footprint now, a consequence of its booming domestic growth and breakneck international expansion. And decisions that once were made on purely parochial grounds — like censoring Web sites, protecting the interests of its state-owned companies and restricting the flow of foreign news and entertainment into China — now have international ramifications.

“This is a country in the middle of a big transition in its global role,” said Kenneth Lieberthal, a veteran China analyst now at the Brookings Institution. “They’ve always looked in the past to what’s good for China, and they still do. But for the first time, added to that is the consideration that they’re in the position of being rule-makers, not just rule-takers.”

China’s leaders, he said, “are just beginning to learn how to handle that.”

Consider the following: Since late May, Beijing’s Industry and Information Technology Ministry had more or less insisted that so-called anti-pornography software, called Green Dam-Youth Escort, would eventually be packaged with every newly purchased computer.

On Thursday, the ministry backed down, calling the requirement a “misunderstanding” spawned by badly written rules. Officials offered no other explanation, but the retreat followed weeks of protests by outsiders — from foreign computer makers to foreign governments to foreign corporate branch offices — that said the software stifled free speech, compromised corporate security and threatened computers’ stability.

Computers are not the only example.

This week, the World Trade Organization told Beijing that it could no longer force providers of American books, music and films to distribute their goods through a local partner. Foreign companies saw that rule as an impediment to reaching a broad Chinese audience with their products. The Chinese market is flooded with pirated CDs and DVDs whose contents’ creators receive no money.

The Chinese legally may appeal the decision, but the foreign minister, Yang Jiechi, indicated in a Geneva speech that simply ignoring it was not an option. China worked for years to join the global trading system and is bound, as much as other nations are, by its rules.

“China will never seek to advance its interests at the expense of others,” Mr. Yang said, according to Reuters.

Similarly, Chinese prosecutors appeared this week to retreat from earlier statements that they would prosecute employees of Rio Tinto as spies for stealing state secrets.

While the espionage allegations were not spelled out, they were apparently related to delicate commercial negotiations over the price of China’s imports of iron ore for its steel mills.

Rio Tinto executives have strongly denied the accusations, and both the United States and Australia said China’s actions could have both business and diplomatic repercussions.

While the Rio Tinto employees still face lesser charges of bribery and theft of trade secrets, the espionage threats stirred broad unease among foreign companies operating in China, which feared that they could face persecution and closed-door trials for engaging in what much of the world would regard as bare-knuckle business tactics.

Yet whether such instances represent trends or exceptions — or neither — remains a matter of some debate.

Increasingly, many experts say, Chinese officials appear to be aware that their actions have far broader ramifications than they might have had even a few years ago.

“Fifteen years ago, the mantra in China was, ‘We’re the victims of a system that’s stacked against us,’ ” said James V. Feinerman, an expert on Chinese law and policy at Georgetown University in Washington.

China’s entry into the world trading system, he said, is slowly helping to change the nation’s view of itself from that of an outsider to an insider with a stake in the global system’s success.

Other experts note, however, that what outsiders see as carefully calculated policy changes may in fact be nothing of the sort.

The government’s decision to install censorship software on computers — and its subsequent reversal — is but one example, they say; the original proposal was probably pushed by a government clique that found itself outflanked once Internet users and foreign corporations began objecting to the plan.

“Is China susceptible to international pressure? Of course it is,” said Charles Freeman, a leading China scholar at the Center for Strategic and International Studies in Washington.

“China does have international interests, and they are impacted by what it does domestically,” he said. “There’s a constant battle between agencies over how much political capital to expend on international issues against domestic interests.”

In any case, few experts are willing to stake their reputations on a prediction that Beijing’s recent softening of some positions signifies a strong trend.

To the contrary, Mr. Feinerman said, China had undergone “a real pushback” in the last five years on some fronts, reasserting political dogma in some areas where commercial norms and the rule of law had begun to have more sway.

And Jonathan Hecht, an expert on Chinese law at Yale University’s China Law Center, said that developments in China should be viewed against a history of great leaps forward on such matters, followed by equally great retreats.

“I’ve given up predicting long-term trends,” he said.

PetroChina in huge Australia deal
BBC NEWS | Business | PetroChina in huge Australia deal

PetroChina's deal is the latest to meet China's growing energy needs

PetroChina, Asia's largest oil company, has signed a $41bn (£25bn) deal to purchase gas from a field off Australia's north-western coast.

The pact is the largest trade deal in Australian history and was hailed by Prime Minister Kevin Rudd.

"This agreement provides the basis for the creation of thousands of jobs and also injecting billions of dollars into our economy," he said.

The 20-year deal comes despite recent tensions between Australia and China.

'We need China'

Last week, four employees of Anglo-Australian mining giant Rio Tinto were formally arrested in China on suspicion of stealing Chinese trade secrets and taking bribes. Stern Hu, head of Rio's iron ore operation, was later charged with commercial spying.

Rio had pulled out of a deal that would have seen it receive a $19.5bn investment from China's Chinalco.

A diplomatic row has also broken out over a visit to Australia by exiled Uighur activist Rebiya Kadeer, who Beijing accused of inciting the recent riots between ethnic Uighurs and Han Chinese in Xinjiang province.

"China needs us, we need China," Trade Minister Simon Crean said after the PetroChina deal.

The Chinese company has agreed to buy 2.25 million tons per year of liquefied natural gas from the yet-to-be developed Gorgon gas field, from the share owned by US oil and gas giant ExxonMobil.

Mr Rudd said the deal would create up to 6,000 jobs.

Beijing envoy back home for urgent talks

KEVIN Rudd has called Australia's ambassador to China, Geoff Raby, back to Canberra for an emergency summit as Sino-Australian relations continued to deteriorate, with the country's state-run English-language newspaper accusing Canberra of being the "champion of an anti-China chorus" and siding with terrorists.

Mr Raby was forced to leave Beijing in the middle of Resources Minister Martin Ferguson's equally sudden visit to promote the $50billion natural gas deal between the North West Shelf Gorgon project and PetroChina and meet the country's top economic chief, Zhang Ping, a trip seen as an effort to cool rising diplomatic tensions.

"He is in Australia and he is going back again next week -- he is toing and froing to Australia all the time," a spokeswoman for the embassy said. Mr Raby already has a visit to Australia planned next week and has cancelled a series of engagements at the last moment.

Mr Raby's return comes a day after Foreign Minister Stephen Smith defended the government's right to issue a visa to exiled Uighur leader Rebiya Kadeer. The Chinese have branded Ms Kadeer a terrorist and accused her of masterminding the riots in Xinjiang last month in which almost 200 people died.

The Australian was the first to report this week that relations between the countries had hit their lowest point in a decade, since John Howard met the Dalai Lama.

"The Chinese authorities at a range of levels, including my counterpart, Foreign Minister Yang, made very strong representations to Australia about the proposed visit to Australia of Rebiya Kadeer and made representations to us that we should prevent her visit," Mr Smith told parliament.

"As a consequence of Australia granting her a visa for the third occasion that she had visited Australia in her private capacity, the Chinese authorities made it very clear to Australian officials they were most unhappy with her visit."

China cancelled the visit of Vice-Foreign Minister He Yafei to attend the Pacific-Asia Dialogue in Australia over the issue and hit back at Mr Smith, defending the move in a strongly worded editorial in the main state-run English language newspaper China Daily, which blamed Australia for other issues causing heat between the two nations.

"The cancellation of a visit to Australia by the Chinese Vice-Foreign Minister is a restrained and reasonable response on the part of Beijing when that country has challenged China's core national interests," the China Daily said.

"There is no need for Canberra to feel 'regret' over this incident, because a little soul-searching would point to the self-evident fact that it has no one other than itself to blame for the souring of Sino-Australian relations."

Mr Smith told parliament that if China took any further action over the decision, that "will be for us a matter of regret. But we will deal with that matter sensibly, and we will not resort to the flip-flop politicking".

As well as Ms Kadeer's visit the Chinese are furious about the defence white paper released in May, their inability to get better prices from Australian iron ore miners and the reaction to the jailing of Australian Rio Tinto executive Stern Hu.

"As if this one single issue were not enough to derail bilateral relations, Australian officials have also tried to interfere in China's judicial sovereignty by blatantly pressing China to be 'fair' in handling the spy case involving four employees of Rio Tinto, one of whom is an Australian citizen," the China Daily said

"In doing so, they show contempt for the rule of law and go against international norms that underscore mutual respect ... Recent events and developments suggest that forces seeking to keep the two sides apart are thriving, and Canberra is responsible for that."