Rio Tinto, state secrets, smoke and mirrors

Hu Jintao's sudden return from the G8 in Italy was most unusual. While he would certainly face criticism on policy to reduce global warming, the reason for his return was unrelated.

Hu is a strong supporter of Li Dezhu's repressive racial policies. He supports the qiangren (strongman) and "strike hard" policies implemented by his protégés Wang Lequan and Zhang Qingli in Xinjiang and Tibet.

These repressive policies have only succeeded in polarising the situation in both regions and drawing international sympathy for Tibet and raising the profile of the Dalai Lama. This recent repression and demonising of Rebiya Kadeer has given the Uyghurs what has been missing in their struggle, a high profile leader figure.

This is not the time for Hu Jintao to be associated with any other bad news in China, and the return may have been to fend off rising criticism from within the CCP.

A different perspective

Is it really just about Rio Tinto?

The arrest of Stern Hu on charge of stealing state secrets is a red flag for foreign companies with offices and staff in mainland China. The charge, relating to national and security grants the Chinese government unprecedented and unrestricted access to a company's premises and records, including confidential and highly sensitive material.

Such information could have the potential to provide China with a commercial, (or even a political) advantage in negotiations and/or operations with existing mining partners in Australia. It would be a serious advantage when negotiating possible future investments in Australia's resources.

Is it about Hu Jintao?

The highly publicised arrest could serve two purposes for the Chinese people.

The state media could present the case as the cause of the failure of Hu Jintao's efforts to secure China's demands in the iron ore price negotiations and cast doubt on Rio Tinto's honesty and integrity after its withdrawal from the landmark Chinalco Deal and venture with BHP-Billiton. Failure to secure the price cut would affect the viability of China's steel industry, and that in turn, will affect China's economy

This is not the time for Hu Jintao to be associated with any other bad news in China and this arrest would shore up support for Hu Jintao.