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Stern Hu: Rudd must work the Chinese system

By Gary Brown - posted Tuesday, 21 July 2009

The recent arrest in China of Mr Stern Hu, a senior Rio Tinto executive holding dual Australian and Chinese citizenship, has become a cause célèbre, and is being dangerously (especially for Mr Hu) politicised by the Federal Opposition.

Mr Hu is allegedly involved in what the Chinese claim has been systematic bribery of Chinese personnel with access to sensitive commercial information regarding China's bargaining strategies for iron ore prices. The affair has all the hallmarks of a big police operation anywhere, with near-simultaneous arrests of a number of these personnel along with Mr Hu and some Chinese citizens in Rio's employ.

Where it deviates from our normal experience, of course, is that all the accused people now face a judicial system typical of a dictatorship where expediency rather than law and evidence can govern outcomes. Thus Mr Hu has been detained and publicly accused, but at the time of writing still has not seen a lawyer or been formally charged. Ominously, it seems that what we call commercial secrets are considered "state secrets" in authoritarian China.


Though the Beijing regime is a ruthless and increasingly arrogant dictatorship, its leaders are not fools. They will be aware of the potential economic damage should this affair result in a flight of frightened foreign business people and capital, and of the political risks of arresting foreigners from major multinational corporations without strong grounds for doing so.

For these reasons, I think the Chinese really believe they can prove their allegations against Mr Hu to a standard which should satisfy reasonable people (I do not necessarily believe this myself: like everyone else, I have no access to the evidence). But even were he really guilty of economic espionage, the arbitrary and political nature of Chinese "justice" might just prove to be an asset, because careful management may rescue him from a Chinese prison as part of a purely political transaction.

But careful management is the key. Consider the case of Mr Francis James, an Australian journalist who simply vanished at the then Hong Hong-China border in 1969. Extensive but very discreet inquiries by Gough Whitlam (a friend of James', and Opposition Leader at a time when the Liberals in power did not recognise Beijing) established he had been arrested on unspecified charges. Controversially visiting China in 1971, Whitlam (again discreetly) pressed for James' release.

Publicly, Whitlam said nothing substantial about the case, though he was criticised by conservative politicians for "abandoning a friend". Then in early 1972 the declining Liberal Government heard privately that James would soon be released. Anxious for some good publicity they leaked this to the press, causing the annoyed Chinese to change their minds. James was not released until after Whitlam came to power at the end of 1972: the Liberals' cheap posturing cost him another nine months in a Chinese jail. (This account is based on that in Graham Freudenberg's book A Certain Grandeur, Sun Books 1978, pp.213-14).

I hope this demonstrates why it is essential for Mr Hu's future outcomes that Malcolm Turnbull and his colleagues desist at once from their megaphone diplomacy on his case. It is irresponsible in the extreme to be bellowing bad advice which can only annoy the Chinese. Once you engage at the top level and get a decision you are stuck with it - there is no further recourse - so it is wise to refrain from such until you are as sure you can be that you will get an acceptable decision.

Turnbull would foolishly exhaust all our ammunition in one go. If by now Rudd had rung the Chinese President or Premier and been told with some asperity: "Hu is guilty and will not be released", what of Mr Hu then? Turnbull's deficient judgment and lack of deliberation imperil Hu's welfare.


As far as we now know, Mr Hu may be guilty, or he may not. Certainly he can expect no "presumption of innocence". But having detained him, the Chinese still need to prove - to a standard acceptable to their major trading partners and foreign investors; a Maoist-style show trial simply will not do - that they were entitled to do so. Effectively, they need to show that Mr Hu has done things which would be a business crime were they done in Australia, the US or any other advanced economy.

As Rudd has warned, and subsequent official American interest in the case proves, a lot of people important to China are watching, though most, not wishing to make matters worse, are saying little on the record. But that will change should Hu's detention prove to be arbitrary and unjustified, or reliant on extorted "confessions" and trumped-up evidence.

Despite the suggestion of unrealistic expectations, we are fortunate in Rudd's Chinese experience and language skills. He is well qualified to guide our diplomats in "working" the Chinese system with discretion and delicacy to secure Hu's freedom now or later, and he retains the option of personal intervention should it appear worthwhile. None of this guarantees favourable outcomes, but it can hardly do any harm.

If I thought it would do any good, I would implore Malcolm Turnbull to remember what Mr Hu is facing and what our government is trying to head off. China executes people for offences which in more civilised countries attract five- to ten-year prison terms; and even a prison term in China little resembles one in Canberra's new state-of-the art and human-rights-compliant jail.

Mr Turnbull thinks stridency helps both Stern Hu and his own political fortunes. It's the easy option, superficially attractive in the short term. But superficial is becoming a synonym for Turnbull. With friends like that, Mr Hu hardly needs enemies. His chances could improve were Turnbull just this once to curb his inane tongue; but unfortunately that's a bit like asking a brook not to babble. The Liberals need to ensure that short term also becomes a synonym for Turnbull before he does something that damages not just his own party but Australia's wider interests.

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About the Author

Until June 2002 Gary Brown was a Defence Advisor with the Parliamentary Information and Research Service at Parliament House, Canberra, where he provided confidential advice and research at request to members and staffs of all parties and Parliamentary committees, and produced regular publications on a wide range of defence issues. Many are available at here.

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