US Barges In on China Holding Oz Mining Execs

I am of two minds about this. The United States has long enjoyed playing the role of globocop in world affairs. Despite its fast-shrinking economy and concomitant decline in global influence as a model to be emulated, the US largely thinks it can play the role it did before. A few days ago, I mentioned the case of Rio Tinto mining executives being detained by Chinese officials on suspicious "national security" grounds. It is of course more illuminating that negotiations of Chinese state-owned steel mills with Australian providers of iron ore have come to naught despite protracted negotiations.br /br /Into this picture enters Uncle Sam. Fearful of China jailing its own executives (and Chinese executives working for them), the US Commerce Secretary Gary Locke is set to discuss this matter with his Chinese counterparts. Remember, too, that Gary Locke became America's first a href="http://en.wikipedia.org/wiki/Gary_Locke"Chinese-American governor/a in Washington state not so long ago. Then again, Aussie PM Kevin Rudd is a fluent Mandarin speaker--for all the good that's done for a href="http://www.reuters.com/article/topNews/idUSTRE56F1A520090716"Sino-Australian relations/a:br /blockquoteThe U.S. commerce secretary plans to bring up "fair treatment" for employees of foreign companies in meetings with Chinese officials on Thursday, in a sign of international concern over the detention of four Rio Tinto executives. Stern Hu, an Australian citizen, and three Chinese colleagues were detained this month for stealing state secrets to aid Rio in price negotiations for iron ore, which is used in steelmaking. At least one Chinese steel executive is also detained and the probe has reached many of the largest mills.br /br /The murkiness of state secret laws puts foreign investors potentially at risk when dealing with state-owned entities and potentially sensitive economic information. "These are of course of great concern with respect to U.S. investors and multinational companies from around the world that have projects here," Gary Locke said in an interview with CNN. "We need to have transparency, we need to have assurances and confidence that people working for these multinational companies ... will be treated fairly.br /br /Rio Tinto evacuated some expatriate staff in China involved in researching the iron ore and steel industry after the detentions, sources in the mining industry told Reuters. Rio Tinto did not immediately comment on the decision, which was also reported by the Australian Financial Review on Thursday...br /br /At the official press conference later that morning to release the second-quarter data, National Bureau of Statistics spokesman Li Xiaochao said the leak would be investigated but stopped short of saying it constituted a "state secret..." The detentions have complicated annual negotiations to set the price at which mills import contracted iron ore.br /br /Reuters reported on Wednesday that in the absence of a formal settlement between the Chinese steel industry and iron ore suppliers Rio Tinto and BHP Billiton, major Chinese mills had agreed to pay 33 percent less than the 2008 prices, in line with settlements reached by Japanese and Korean mills.br //blockquoteMeanwhile, span style="font-style: italic;"Reuters/span further a href="http://www.reuters.com/article/newsOne/idUSTRE56F0ZN20090716"notes/a that Chinese secrecy laws are fairly wide-ranging, allowing them to send all sorts of to the gulag without much trouble over Wstern jibba-jabba concerning human rights:br /blockquoteThe options for Australian miner Rio Tinto, or indeed anyone, to help four employees detained in a Chinese state secrets investigation are limited, lawyers say, as laws leave great latitude to investigators and prosecutors. Under China's sweeping laws, the health and even the birthdays of the current leadership are considered state secrets.br /br /Almost anything else can be classed as secret, especially economic data, as China moves from a system where everything once belonged to the state to the current free-for-all where everyone scrambles for any advantage they can get...br /br /Chinese diplomatic protocol prevents Australian consular official from asking Hu about anything other than his physical welfare. After their first visit last Friday, Beijing is not required to allow another visit for one month. During investigations, neither the defendant nor the lawyer have access to documents on which a case in based, and lawyers cannot challenge the "secret" designation,...Lawyers are often not allowed to see their clients until the state security apparatus has concluded the investigation and formally handed the suspect over for prosecution. That can take months, or even more than a year.br /br /Defense lawyers in such cases themselves have a legal "obligation to guard secrets," said lawyer Guan Anping, who took on state secrets cases in the past. Trials involving state secrets are held behind closed doors, and family members of defendants are barred.br /br /The diplomatic fuss could benefit Hu in areas where Chinese authorities exercise discretion, for instance in allowing earlier access for his lawyer or increased privacy in consultations...His three Chinese subordinates, and any Chinese executives caught up in the investigation, have far less protection. Rio could hire a lawyer for its Chinese employees, but not much else.br /br /Article 111 of the Chinese code, which refers to illegally providing state secrets or intelligence to organizations or people outside the country, leaves a lot of room for interpretation. Sentences can vary from six months to death, and some foreigners have been expelled after conviction in the past. "Intelligence" could include information that may be public in China, but considered embarrassing if aired abroad...br /br /The Chinese business culture is additionally confusing because of the hybrid form of many state-owned companies, which are listed entities but also integral to a state-directed economic model that China adopted from the Soviet Union. One legacy of the system is that a "state secret" can be in the hands of a commercial enterprise, and the cost of a raw material -- such as iron ore -- can become of national interest./blockquotediv class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/9031925921218676704-7636938364520988653?l=ipezone.blogspot.com'//div