For those who have not been following the news about Stern Hu, here are some links:

http://www.theaustralian.news.com.au/story/0,25197,25784189-5013871,00.html

http://www.bloomberg.com/apps/news?pid=20601081&sid=aCVVjnULkWcA

Stern Hu is a Chinese born Australian executive with Rio Tinto. He was based in Shanghai. The Chinese authorities arrested him and charged him with bribery. He is currently in custody in China.

Most Australian pundits have been working on the assumption that Mr Hu is an innocent victim of Chinese bloody-mindedness.

Perhaps. In fact, probably.

But then again, perhaps not. Perhaps the Chinese authorities really do have a case. It's not as if companies never resort to bribery.

Anyone got any thoughts

My main concern in this is that we will never be in a position to find out.

If bribery did take place, it is unlikely that Rio Tinto would leave any kind of paper trail. If they didn't, Hu's toast.

And he will be hung out to dry by the company, leaving Kevin Rudd with a delicate political problem, balancing the clamour to "bring our boy back home" with the need to respect the legal system of a foreign country.

If the Chinese courts find him guilty and give him a death sentence - which is an option open to them for thse charges - that will add another "but we don't hang our people for the same offence" fracas, like the ones we have periodically with places like Indonesia.

If Rio did leave a paper trail, our Mr Rudd will have an extra level of pain to contend with. The negotiations would not only cover the personal story, but have trade implications too. That particular loss of face could cost us billions over the next few years, as prices are struck while we are on the ethical "back foot"

In either of the above scenarios, we may never be privy to any truths that emerge, if the two countries decide to resolve one or the other behind closed doors. Which, given the i) loss of face and ii) trade implications, they may well choose to do.

Given all of that, one outcome that I doubt we will see is that (our) Mr Hu will be handed back to us, cleared of all charges, and with an apology from the Chinese government for the inconvenience caused.

If that happens, I will take my hat off to Kevin Rudd, master diplomat.

Then I'll eat it.

just like nuttall takes bribes..[so too do petty oficials the world over]..miners are renowned for their generosity..of course he is guilty...for gods sake look at who is yelling the loudest..an ex banker..now a politition...who's liberal party has gained hansomly from the same largess...

just like nattall...just like mining does globally...its the same same...even kevin needs/thinks to bribe the pope with wine...every time they go visiting anyone..the bear gifts..be it ugly apec clothing...or cash..its the..[their]..game-plan...man

Who knows? Who cares?

Hu is probably an 'Australian of convenience' anyway. But the fact that they have now arrested three more Chinese nationals working for the same company might just bear out what one China watcher said: the Chinese have spat the dummy because of recent Australian Government knock-backs to their attempts to make further inroads into Australian mining ownership.

China is a very nasty country, with no regard for Australia or any other country they deal with. China only deals with us because it has no choice. It's about time we started called a few shots for a change.

In the meantime, no sympathy should be wasted in Hu, who should no all about China's methods.

I'm very surprised to hear so much from the Opposition in term of "Mr Rudd should get on the phone to the Chinese Premier". My question is "And say what?" I also wonder if there would be so much uproar if it were me -a little old grandma who had broken a law in say,Switzerland?

Steven,
I'm on the fence here. I think that in the wash up of recent arrests, cancellations of trading rights I think it is indeed possible that he is 'guilty' of industrial espionage.
What we have here is a conflict of interests and cultures. Expectation of "greasing the wheels" is common in China (power for selfish reasons.A parallel could be drawn with Gordon Nuttal's abuse of power. I withdrew from a business venture there when we were confronted with the need to do so.
The conflict of interest comes from the PRC's involvement in business and drawing issues like strategic from what is I am led to believe common practice.
Hu to my mind made the error of not seeing the govt's interest in the iron ore negotiations. (one should not the reasons for the license cancellations. I wonder how much the rejection of the failed buy in to our iron ore supplies had to do with the subsequent PRC actions. The CCP is inclined to be extremely self obsessed and inclined to play brinkmanship....e.g. Taiwan.
I'm not surprised and view this as part of dealing with with a regime like exists in China i.e. one that overtly mixes politics with business. Singapore is at one end of the continuum and Nth Korea at the other.

Guilty or not I don't know. What I do know is that he would be a lot more comfortable in the hotel type prison accommodation in Australia than the hell holes in China.

Could Stern Hu be guilty? I certainly wouldn't be surprised if he is, but that's not really the major point here, is it?

This case goes to the heart of the biggest problem with a minor economic power like Australia's utter dependence on companies like Rio Tinto selling our raw materials to a mega-economy like China's, where - as others have pointed out - the totalitarian State is inseparable from Chinese corporations.

Not to mention the cultural vicissitudes of the trading relationship. I don't think anybody's mentioned it here, but I understand that Stern Hu has dual Chinese and Australian citizenship, and further that China doesn't recognise dual citizenship - which means that from the Chinese perspective the Australian government has no particular standing in advocating for Stern Hu.

The calls from Turnbull et al for Rudd to 'pick up the phone' are mere political grandstanding - as they well know. There would be absolutely nothing gained for Stern Hu nor Australia for Rudd to adopt the kind of strident position that Turnbull demands from the comfort of Opposition. Of course, Rudd's 'special understanding' of the Chinese was much lauded in the early days of his tenure as PM, so it's not entirely unreasonable to expect that he would be personally involved in trying to negotiate a satisfactory resolution to the situation.

Mind you, I wouldn't be surprised if that's exactly what's going on right now, earnestly and above all away from the glare of sensationalist media scrutiny.

Yes he could be guilty, of acting as modern western business men always do.
Compiling a background on his customers needs and wants and likely bargain thoughts.
Of any crime?
No none at all.
Kevin Rudd however has been.
Yep it is me, no one has captured my key board no gun in my back.
Kev, Bloke that ego, its done you no favors.
Settle down, think about it, me old China plate.
You fell for Turnbulls taunts, you heard the beast Bronwin big breasts laughable , idiotic statements, you mucked in too hard too early.
You and lets face it the world, knew China is not quite civilized in modern business practice.
We both knew you fella and me, it was unwise to get tough in public, that to do so would make it far worse.
You I and Turnbull know it has now done that got worse, we all knew it would.
Bloke can I say this, Turnbull is no better a leader than our mob in NSW, yep that bad.
His mob is as lost as Barry O,Farrel, gee even as far in it as whats his name the rubbish tin bloke?
We however have no need to fall for Turnbulls tripe, to get our poor Innocent bloke in even more trouble because you did just what Turnbull hoped let your boots rule your brain is an own goal.
CHINA? not yet to be trusted in international trade, lets not give our selves to them,
it may not help us to get out of debt but they are acting just as America and someones mother England always have, in their own self interests, this reminds me of England importing drugs to them, just as illegal and wrong .
Let the poor bugger go he has done no wrong, you and Turnbull have however Kev, stick to your guns next time ok?

CJ

Excellent summary of the situation.

Saved me from having to make the exact same post, in all modesty of course.

;-)

The real scenario is probably that Hu was fending off bribery offers during the Chinalco bids for Rio Tinto. The detention of Mr Hu is merely sour grapes for not getting their pound of flesh in Rio Tinto and quibbles about iron ore prices.

It would not be left field to suggest that bribery is probably a common and accepted way of doing business with China and now they have lost face.

In seeking the truth about whether Mr Hu is guilty of taking bribes we should also ask who was offering them.

The Chinese play the game according to their
own rules. They don't like losing face.
They lost face when Rio Tinto pulled out of
the deal (selling their company mine to the
Chinese).

Could Stern Hu be guilty? We'll never know.
But only a fool would risk doing what he's
accused of having done - in a communist country,
particularly of 'eastern mentality.'

It is hardly believable that a 'Western,' businessman
could bribe or be in cahoots with twelve (or sixteen -
I can't remember the exact numbers) Chinese Steel
Company Directors. Such an event if it would occur -
would take years to eventuate and not the short period
of time that these Chinese accusations refer to.

It would appear that China will take its time to exact
its 'face saving,' and release the Rio Tinto executives,
but Chinese Steel Mill Executives will have to pay the
price of China's loss.

I feel that the PM who has worked in China for ten years
in the Diplomatic Service - has an understanding of the
Chinese psyche - and is letting time take its course -
to China's 'face-saving,' satisfaction. Afterall China
does need Australian iron-ore and world trade.

cont'd...

I forgot to add that the Leader of the Opposition,
Malcolm Turnbull, is causing extensive damage to
Australia - China relations, by his constant outbursts
on the issue in the media.

Sometimes patience is its own reward - especially
in attaining the release of the Rio Tinto Executives,
and allowing China to 'save face.' As a politician -
and a lawyer, Turnbull should be familiar with the
various peculiarities of Nations in our sphere of
influence.

The PM may not extract an apology from China as Pericles
suggested. However, I'm sure that he will obtain the
release of the executives - because the PM has diplomatic
experience in dealing with China.

It seems to be a no-win situation. Bribery (or corporate friendship) seems to be a common practice in Chinese business. It also seems to be illegal. So - does someone in Hu's position break the law to fit into the Chinese business scene, or does he obey the law and watch doors slam in his face?

Perhaps the best lesson to learn from this is that doing business in China is not for the faint-hearted.

China functions on bribery,that is why Stern Hu was probably selected to deal with China,thus it probably became a real trap to ensnare Hu for political advantage.

India is far worse in the corruption stakes.They have raised it to an artform.There are companies that have left India since they cannot afford the bribes to various Govt officials to continue functioning.Thus Hu may well be guilty,ensnared by the system he was sent to subdue.