【CNNBlog】Rio case stirring executive anxiety

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Rio case stirring executive anxiety

Posted: 1042 GMT

It seems one of the biggest challenges in covering the Stern Hu/Rio Tinto case is trying to explain how the Chinese legal system works, or doesn’t work. For a start everything is in Chinese, which may seem pretty obvious, but it makes it pretty tricky; there are translation issues, which starts to get really tough when you include legal terms, as well.


China says the Rio Tinto case will not affect the development of ties with Australia.

On Wednesday came word that the “Rio Four” — as they’ve being called by some in Australia — had been “arrested.” This was the cause for a great deal of confusion in our newsroom – hadn’t they already been arrested? Didn’t that already happen when police swooped in last month? How can someone be arrested by police without being arrested?

And this is perhaps why the Stern Hu case is causing such nervousness among so many of my highly-paid, still-employed, executive friends in Beijing. A number of lawyers who have nothing to do with the Rio case explained to me how it works. Unlike other countries such as the U.S., Britain and Australia, in China police have the power to detain those suspected of being up to no good. They can do that for 37 days. No arrest, no charges, nothing.

So you sit in a jail for 37 days, 888 hours, wondering what it is you’ve done (or if you know, wondering how they found out and what evidence they have). By day 38, police must decide to either formally arrest you or let you go. In the Rio case, they went ahead with the arrests. The police have another two months to gather evidence, can apply for an extension of a month, and then if they need to, another two months and another two months. That’s a total of seven months. All the time you are in a jail, wondering what is going on.

If there is good news here for Mr. Hu and the three others it is that they’ve been arrested on charges of illegally obtaining commercial secrets, not state secrets. Lawyers told me those are likely to be the charges they’ll face in court if it goes that far.

There’s always a slim chance that illegally obtaining state secrets could get back into the mix (legally it’s possible and politically anything is possible, as well.) But there does seem to be a sniff of maybe a deal in the works. China is backing away from the most serious allegations, the heat is coming out of the relationship a little. China’s Deputy Commerce Minister, Fu Ziying, said Wednesday he believed “this case should not, and will not, affect the stable development of the economic and trade bilateral ties between China and Australia.”

And a source of mine in Canberra tells me a Chinese embassy car has been parked in front of the Department of Foreign Affairs and Trade for most of the early afternoon.

Coincidence? Maybe, but four Rio employees sitting in a Shanghai prison will no doubt be hoping it’s not.

Posted by: CNN International Correspondent, John Vause
Filed under: Asia • Business • China

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