Mystery surrounds Australian arrested in China on spying charges

Australian consular officials will today get access to the general manager of Rio Tinto’s iron ore operation in China for the first time since his arrest. So what do we know about Stern Hu?

Hu’s Chinese name is Hu ShiTai. There are discrepancies in his age, with some Chinese media saying he was born in 1967, but Australian media saying he’s 53. He is believed to have been born in Tianjin, a northern city near Beijing. Chinese reports indicate that he attended Beijing University and after that ventured to Australia to undertake further study, taking Australian citizenship in 1997.

On Sunday, July 5, Hu was arrested along with three Rio Tinto colleagues, one of whom is described as a ‘manager’, by Shanghai Police. Since then, it appears the case has been passed over to the National Security Bureau, the Chinese intelligence service, leading to confusion over exactly what kind of ‘espionage’ Hu is under investigation for – political or commercial.

The Chinese Government yesterday indicated that Hu is being detained for stealing state secrets for a foreign country. According to Qin Gang, a spokesman for the Ministry of Foreign Affairs, prosecutors have sufficient evidence that Hu stole state secrets “hurting China’s economic security”.

Details emerged yesterday about another arrest, this time of Tan YiXin. Tan works for Shougang International, a subsidiary of Shougang Group, which has worked with Rio Tinto’s Hamersley Iron in the Shougang area. According to Chinese media, local sources say Tan and Hu had a close working relationship and that Hu had visited Tan to have meetings, including a meeting in early April where they discussed pricing and “other issues”.

According to the website of Shougang International (full name China Shougang International Trade & Engineering Corporation), it has a registered capital of RMB500 million and is a state-owned enterprise created by the Chinese Government in June, 1992.

“As a subsidiary company of Shougang Group, Shougang International represents its parent company to conduct overseas investment,” the website says. “Shougang International mainly deals with import and export business, contracting overseas projects, international economic and technological cooperation, real estate development, hotel and apartment management, logistics, estate management, domestic trade and so on.”

The Chinese media has rejected Hu’s high-level title (he is second in command in China only to country manager Anthony Loo), painting him instead as a glorified salesman, saying that he travelled extensively in the country from the Shanghai office to negotiate deals. Nonetheless, they’re indicating that he wasn’t merely a rubber stamp guy behind a desk in what is a small regional office.

People I’ve spoken to in China describe Hu as a “nice guy” and “very professional”. One said that Hu didn’t have “gold chains and slicked back hair”. He has given speeches, attended seminars and counts numerous other expats amongst his friends. He has a wife, also based in Shanghai, but few details have emerged about her, as she battles to gain access to her husband, with who she has had no contact in six days.

It really doesn’t matter what happens now – whether or not Hu is formally prosecuted, or whether or not the charges, if brought, are successful. Hu’s career in China is undoubtedly over. Even if he is now cleared, the stigma surrounding him will make business relationships difficult.

Unlike the other detainees, Hu has Australian citizenship, bringing with it the support and attempted intervention by the Australian Government. However, if the case does proceed to trial, there are no guarantees that free access to the court will be granted.

China has denied that the case is linked to ongoing iron ore price negotiations with producers for the 2010 year. It has also issued a warning to Australia not to politicise the affair or overstate the issues involved.

But given the reverberations this case is causing in the expat and diplomatic communities, China is naive to suggest that this won’t be a thorn in the side of Chinese-Australian relations going forward. Unless, of course, China throws open its channels of communication and truly articulates the charges, the evidence and allows for an open and fair trial.

This article first appeared on Business Spectator.