Australia, China Report No Progress On Rio Case

PHUKET, Thailand (AP) -- Australia's Foreign Minister Stephen Smith met with his Chinese counterpart Thursday over the case of a Rio Tinto Ltd. manager accused of espionage in China but made no progress resolving the issue.

Speaking on the sidelines of a regional security conference, Smith said he told Chinese Minister of Foreign Affairs Yang Jiechi that he hoped the matter could be handled quickly and was told that it was an individual matter and under investigation.

Australian citizen Stern Hu, the manager of Rio's Chinese iron ore business, and three Chinese co-workers were detained July 5 during contentious iron ore price talks. State media say they are accused of bribing Chinese steel company employees to get information on China's negotiating stance.

Australia is a major supplier of iron ore and other minerals to resource-hungry China.

"We understand this was a matter now being dealt with in accordance with Chinese law and there was an investigation under way," Smith said. "It would be in everyone's interest not just Mr. Hu's for the matter to be dealt with expeditiously."

Despite the inability to resolve the issue, Smith emphasized neither country would let it affect their broader relationship. "Both of us have been at pains to make the point that we don't see this going toward the wider relationship which we regard as very good on economic front and the two strategic dialogues that Foreign Minister Yang and I have held."

Smith, who has voiced frustration that Australia has had to rely on Chinese media reports to glean details of Hu's case, said Wednesday that his government now has a much better sense of the allegations against Hu, though "we have no basis for determining the soundness of them."

"It is quite clear that the detention and investigation relates strictly to economic or commercial matters relating to iron ore negotiations," Smith said Wednesday. "It is also the case that the Chinese have a much broader or wider view of what Australia might describe as state security, state secret or national security matters."

A Chinese diplomat said Wednesday that China has told Australia it has "ample evidence" that Hu and his three co-workers stole state secrets. He Yafei, a deputy foreign minister, told reporters in Beijing that he briefed Smith on the case at a conference last week in Egypt.