Harsh lessons from Stern Hu's trial

There are two important lessons to be learned from the treatment and trial of Rio Tinto executive Stern Hu and his three colleagues.

The first is that China will act swiftly and harshly against those it deems to threaten its economic interests.

The second is that Australia has been exposed as having little or no influence with the leadership of the Communist Party - revealing Kevin Rudd's exaggerated past claims of a special relationship.

Throughout the 2007 election campaign, Mr Rudd carefully cultivated the impression that because he spoke Mandarin and had lived in Beijing he was best placed to manage Australia’s bilateral relations with China.

Mr Rudd constructed a political narrative that suggested he would have unparalleled access to the Chinese leadership and he would even be able to open doors for the United States in its pursuit of deeper engagement.

His claims were highly misleading and misjudged the political reality of what constitutes effective engagement with China.

In that context it is instructive to review the circumstances of Stern Hu's original arrest in early July 2009.

Reports at the time said Mr Hu was arrested on suspicion of espionage and stealing state secrets.

The arrests occurred weeks after the collapse of a proposed $20 billion investment by State-owned Chinalco into Rio Tinto and during increasingly acrimonious negotiations over the price of iron ore which broke down only a month after the arrests.

Authorities in China reportedly claimed that billions of dollars in damage were inflicted on the Chinese economy from the actions of the Rio Tinto employees, portraying it as a matter of national security.

This claim purportedly related to the payment of higher iron ore prices than China deemed necessary.

The charges against Stern Hu and his colleagues were later changed to corruption and stealing commercial secrets.