The East Asia Summit: China, Rio Tinto and the mysterious arrest of a Chinese-Australian

Did you know there was an East Asia Summit going on? It was supposed to happen a year ago in Bangkok, and then there was a coup, so they moved it to Chiang Mai, then to Phuket, then to the world’s whoring capital Pattaya, and that had to be cancelled too, so now it’s happening in the more sedate resort of Hua Hin. (Memo to brewers: if you want a piss-up organised on your premises, don’t ask the Thais.)

One of the bigger real issues relates to the arrest in China of a man called Stern Hu. Yes, OK, let’s can the “Hu Hee” jokes. Hu is a perfectly normal name in China – the Supreme Leader bears it – and he adopted the name “Stern” after Isaac the great violinist. That’s several steps upmarket from a waiter I once knew who assumed the moniker “Stallone”. Mr Hu is a naturalised Australian, and was until his arrest in July the chief representative of Rio Tinto. He has been charged with bribery and the revelation of state secrets.

Serious stuff, eh? Well, that depends. China is far from being the only part of the world where doing successful business is likely to involve the odd brown envelope; of course it is against the law, but the law, like most Chinese laws, is only selectively applied. (We’re talking about a country where all extra-marital sex is illegal.) As for revelation of state secrets, well, releasing any information which has not been expressly passed for release by the authorities is against the law. It happens all the time, of course – I’m doing it now – but you can be pulled up for it if it’s in the national interest to do so. So Mr Hu is both guilty and not guilty, according to how sane (or, alternatively, bourgeois-liberal-decadent) one is feeling.

Kevin Rudd, the Sinophone Prime Minister of Australia, is at this meeting. Australia is in the tough position of having to pretend it is in Asia, as it would be foully racist not to, while not forgetting that it is the only country for thousands of miles which disapproves of chaps getting flung into the slammer at a whim. What he is up against, as he probably knows as well as I do, is the fact that the Chinese do not believe that a man called Hu can be an Aussie. We’ll see how far Mr Rudd gets.

Of course there is a backstory to this. Hu’s arrest was uncomfortably close in time to Rio Tinto’s refusal to allow the Chinese aluminium giant Chinalco to boost its stake in RT from 9 per cent to 18 per cent. The message was received and understood: China will not be allowed to muscle in on the world’s metals markets. OK, the Chinese said: say goodbye to Mr Hu, then.

Now, let’s try to maintain a little objectivity here. No-one wants to see the commodities markets dominated by China or anyone else. But that isn’t really what we’re looking at. Three firms – Billiton, Rio Tinto and Vale – enjoy a virtual monopoly over the world trade in iron ore. China is where most of the world’s construction is going on, and the world’s economy is grateful for it. That the Chinese should want a stake in this market is hardly unreasonable.

That the Chinese should respond by arresting an Australian on highly dodgy charges is of course unreasonable. But if the Chinese are treated as people who must be shut out of world markets, how do we expect them to behave? The way forward is surely to lock China into world trade, where everybody’s prosperity depends on everyone else being reasonably sensible. The Chinese can grasp that – they’re not Russians, after all. Talk some sense into them all, Mr Rudd.