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Risky business for China investors 

Hu, a Shanghai-based executive in charge of mining giant Rio Tinto's Chinese iron ore sales, was detained on July 5 while Rio Tinto was acting as lead negotiator for global iron ore suppliers in price talks with Chinese steel mills.

According to Chinese state media, Hu and three other employees who are also detained, are accused of bribing employees of Chinese steel companies to obtain confidential information on China's negotiating strategy.

China's steel industry consumes up to 60 per cent of global iron ore production and Beijing has been pressing for deep price cuts after two years of increases totalling more than 120 per cent.

Resolution

Australian officials meanwhile are continuing to press the Chinese government for a quick resolution to the case.

China says it has evidence that Stern Hu and his co-workers stole state secrets [Reuters]
Speaking on the sidelines of the Association of Southeast Asian Nations (Asean) conference on the Thai island of Phuket, Stephen Smith, the Australian foreign minister, said he still hoped to meet his Chinese counterpart about the matter.

But he dismissed suggestions that failing to meet would represent a setback in the contentious case.

"The Stern Hu matter is not a matter which is going to be solved or addressed by ministers meeting each other," he told reporters on Wednesday.

"It is not going to be solved by one phone call or one meeting as I've seen people suggest."

The detentions have sparked a diplomatic spat with China angrily telling Australia not to interfere after Kevin Rudd, the prime minister, warned that its economic interests were at stake.

However, Beijing has downplayed suggestions that the case might harm business ties between the two countries.

"This will not and should not affect normal trade relations between the two countries. China would not want to see this," He Yafei, China's deputy foreign minister, said.

"And I think the Australian side will treat this just as an individual case."

China is Australia's biggest trade partner, buying up billions of dollars of its exports, including iron ore.