China detains more steel executives
Updated
The reported detention of more steel executives in China has strengthened the view that Beijing is undertaking a wide investigation of bribery and theft of state secrets in the iron ore and steel sector.
While the Australian government tries to find out more about detained Australian citizen Stern Hu, one Chinese economist has told a major conference in Canberra that there could be serious consequences for China. However, another economist sharply criticised suspicion of China, noting that where China is buying commodities, many western countries seized them through colonisation.
Presenter: Linda Mottram, Canberra correspondent
Speakers: Professor Ross Garnaut, Australian National University; Professor Wing Thye Woo, Brookings Institution; Professor Fan Gang, China National Economy Research Institute
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MOTTRAM: When four employees of mining giant Rio Tinto were detained over a week ago in Shanghai, including prominent Australian executive Stern Hu, the Australian government was left puzzled. When, shortly after that, an executive from Beijing's capital steel was detained speculation grew that China's investigation was broader than Rio Tinto. Now, reports from Beijing say at least seven managers from five Chinese steel mills are helping Chinese authorities - adding to that speculation. Within Australia though the debate is highly politicised and focussed on the fate of the one Australian citizen involved. A former Australian ambassador to China, and well known China economy expert, Professor Ross Garnaut, has acknowledged China's image could suffer but has called for calm, particularly since so little detail is yet known about the case.
GARNAUT: It's going to be an episode that does do damage to China and its international partners. It's in all of our interests that that be handled with great sensitivity within and without China.
MOTTRAM: Professor Garnaut has been chairing the Australian National University's annual China Update conference, coincidentally sponsored by the Rio Tinto company, which now faces apparent claims by China that it was given stolen information in a bribery scandal to advantage it in iron ore price negotiations.
Among the China Update participants is Professor Wing Thye Woo, a former senior consultant to China's government, as well as to the government's of the US and Malaysia, and now professor of economics at the University of California at Davis and the Central University of Finance and Economics in Beijing. He used another speaker's presentation on the dangers of large state owned companies to refer directly to the case of Stern Hu.
WOO: The dangers you talk about, the large state owned companies dominating the industrial sector, is a very worrying one, especially in light of the recent arrest of Mr Stern Hu. Because spying by one company on another is a normal procedure. But the question is whether spying on a state owned company is a commercial crime, as in every place of the world, or is it a crime against the state?
MOTTRAM: But it is only one problem in a long list to be addressed by Chinese authorities, in their continuing drive to pull all of their 1.3 billion citizens - and growing - out of poverty.
FAN: This is a natural process and the question is, if the world is ready to include these billions - not only the Chinese, but Indians and other peoples in developing countries - to be in the consumer market and to be as a big consumer of the resources and commodities.
MOTTRAM: That's Professor Fan Gang speaking to the conference. He's one of China's most prominent academic economists, consulting to the Chinese central and provincial governments, including as an academic member of the Monetary Policy Committee of China's Central Bank, the People's Bank. And he had much more to say, including a pointed reference to the west's unsavoury history of colonisation, which sourced vital resources that built what is now the developed world.
FAN: We are not going out by forces, by military forces, and taking the colonies for the resources. We are buying, we are paying for that, we are exchanging for that, we import that. So, I think, if we welcome a developing country to develop, we're welcoming the millions and the billions in poverty in the past now coming into the consumer market, we should welcome them also coming into the commodity market, as a buyer, as investor, as a player, as a participant in that market.
MOTTRAM: Professor Fan's comments throw out a direct challenge to western perceptions. But at least in Australia, China's handling of the Rio Tinto related matters is seen by many as a test of China's credentials.
