[tjmc]

No need to tell the head of Rio Tinto in China about dark gulags. He's been under arrest without charge for several weeks now for allegedly stealing "state secrets" that allowed Rio Tinto to negotiate good prices for iron ore from China's steel mills.

Yesterday the Chinese authorities said Rio's "spying" had cost the country $102 billion over 6 years. Only problem with that story is that Rio's total worldwide iron ore revenues for the last 6 years was $40.75 billion. More here: http://www.businessspectator.com.au/bs.nsf/Article/The-real-...

So by all means do business in China - just don't be too successful. Because your competitive negotiation with a state run business might just turn into spying on "state secrets". The Chinese government has some growing up to do.

[sho]

Also no need to tell the head of Rio Tinto about bribery, corruption, theft of state resources, perversion of justice and even murder - his company has been implicated in all these and more at numerous sites around the world. Their involvement in the Grasberg mine in Papua has been particularly egregious.

I don't have many good things to say about the Chinese govt, but Rio Tinto is an absolutely awful company and it would not surprise me if they had tried their dirty tricks one too many times and been caught trying to bribe or blackmail officials.

Let's wait until the facts come out in this case.

[tjmc]

Not a big fan of Rio either, but does simply working for a bad company justify imprisonment of the local management without charge? The facts should come out before arrests are made, not after.

[sho]

It doesn't justify it, of course, but it does set the scene, as in it's quite likely there's been bad behaviour of some type. If we're going to be drawing conclusions about China's intentions, it behooves us to consider all the relevant information.

These mega-corps always work within the letter of the law, but not the spirit. They can wreak horrendous damage, taking actions in obvious bad faith, and yet get off scot-free because they've legally dotted every "i". Well, it would not surprise me if some part of Officialdom there is really pissed off at Rio for something they've done, can't actually hang anything specific on them, so is just holding them without charge for a while to punish them. That is also within the letter of the law, but not the spirit.

China could be sending a message here - "you play dirty, we'll play dirty". Anyway, just a theory and probably not a good one, but I hope it demonstrates that Rio's unclean hands are relevant to any discussion of the matter.

Simply stating "be too successful in China and this is what happens!" is unlikely to be the whole story.

[sho]

I'd like to follow this up with the information that Hu has now been formally charged:

http://www.businessday.com.au/business/rio-spy-case-stern-hu...

As expected, the charges are commercial bribery and obtaining "commercial secrets of China's steel and iron industry through improper means" in violation of "the country's Criminal Law".

I am not trying to whitewash China here, but I doubt this case is all that unreasonable, and I for one am hardly less confident about business dealings in China because of it.