Thanks to JR at JustRecently’s Weblog for this excellent follow up on a previous discussion about the Rio Tinto spy scandal. For those who intend to do business with China, please take note of the various case studies quoted in JR’s post. You ignore it at your own peril.
Today, a Bloomberg report suggests that the spying charge against Rio Tinto staff is related to a set of internal meeting notes of the Chinese negotiation team that Rio staffs have allegedly obtained through illegal means. As a result, Rio Tinto would be able to know the “bottom line” of the Chinese companies in the talks. What do you think has been cited as “sensitive information”? Let me surprise you: financial data, production schedules, stockpiles, raw-material costs, gross margins and other details of the Chinese steelmakers, the report said.
For heaven’s sake, am I correct in suggesting that most of these so-called “sensitive information” can be obtained through many other public and legitimate means as well? But then of course the “ultimate crime” is that “Rio knows our bottom line”. Big deal! Chinese steelmakers are known to be willing parties in “informing” the media about their 33% cut bottom line. As a matter of fact, many small to medium size steelmakers in China are unhappy with the inefficient way CISA is going about with price negotiation, which only benefits a few large steelmakers of so-called “high-end” products.
Some Chinese sources I consulted today suggest that the evidence against Stern Hu will be confined to his role in the 2009 price negotiation. The fact is: Mr Hu has been negotiating prices for Rio for almost ten years. Why is it that there is only evidence of wrong doing in 2009? In the meantime, Chinese government owned online financial publications such as China Security Journal has suddenly published a large number of Chinese articles elaborating on Mr Hu’s “alleged crime and corrupt behaviour”. I have a horrible feeling that the poor guy has been set up to take the blame.
Meanwhile, according to an ABC Radio report, Stern Hu’s detention is testing the limits of Australia’s relationship with China. Australia’s Foreign Minister Stephen Smith has expressed exasperation that he’s had to glean information about the allegations from public sources – a foreign ministry media conference and a state security public website. Its information he says should be coming through official channels, where many requests have been and continue to be made.