Australian Foreign Minister Stephen Smith Says Verdict against Rio Tinto's (ASE:RIO) 'Hu' Could Harm Business Ties

Monday, March 29th, 2010

Australian Foreign Minister Stephen Smith said today the trial, conviction and sentencing of Australian national Stern Hu to 10 years in prison could harm business relationships between the two countries.

Smith said to reporters, “This was an opportunity for China to bring some clarity to the notion or question of commercial secrets. That opportunity was lost.” Smith added, “There are serious unanswered questions and some of those questions go directly to the confidence that the international business community can or will have in doing business in China.” 

All four Rio Tinto employees pleaded guilty to the charges. Sentencing for the four was from 7 to 14 years in jail.

For Hu, along with his 10-year sentence, he was also fined $146,491. Hu was convicted of stealing commercial secrets and taking bribes.

Most of Smith's concerns were in relationship to the commercial secrets part of the trial which no foreigners had access to. It seems there's a need for clarity there for the international business community so they may understand the parameters of the infraction.

In other words, there needs to be clarity and openness so China doesn't make arbitrary decisions that business aren't able to cooperate with or adjust to if they're hidden from them.

For Hu, there could be a prisoner exchange agreement between Australia and China where he could serve some of the time in his home country.

As far as the assertion this could hurt business ties between Australia and China, that's just posturing by Smith. There's no indication on Australia's part this is really even in the back of their minds. As a matter of fact, business ties are being cemented and growing between the two countries.

Smith made the statement to placate those in Australia who wanted to hear some firm talk by their political leaders concerning the situation.

With China being Australia's largest trading partner, there's no way they're going to allow something relatively small like this stand in the way of their economic growth and prosperity, especially in extremely difficult times like these.

Behind the scenes you can bet the relationship between China and Australia continues on solid footing, and much of this is being said and done to deflate the situation so it doesn't become something bigger which couldn't be ignored.

Article by Gary B

The views expressed are the subjective opinion of the article's author and not of

Tags: australia , business ties , china , rio tinto

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marklu (March 29, 2010 3:56 PM)
Aussies never learn to respect other country’s law. Once their perpetration are caught, they only reaction is to criticize other country’s judicial system, no matter in China, Singapore, Thailand or Indonesia. The Australian do not know what is self-reflection; I will say---shame on you, Aussies!!!
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