Those who seek to understand the intricacies of the Hu affair and its implications for this nation could be excused for being cynical and disappointed at the media’s efforts to inform us. It has floundered around with little purpose, insight or even native intelligence. Its craving to create arresting stories has overridden the need to get the facts right, and has blinded it to the hazard of conjecture and the danger of expressing opinions without supporting evidence. It is only now that some hard data has emerged that enlightens this convoluted case. [more]
Although Stern Hu, a Chinese-born Australian citizen, and head of Rio Tinto’s iron ore operations in China was detained on 5 July, nothing much emerged in the press until 10 July when it was reported that he had been detained on suspicion of stealing state secrets related to iron ore pricing. Commercial intelligence and ‘state secrets’ seem to be one and the same if Chinese authorities say so. The Foreign Minister Stephen Smith said he was ‘perplexed’ and was finding it hard to get information from Chinese authorities.
Despite there being only fragmentary information available that precluded informed analysis of the case, the very next day, Jennifer Hewett was sounding off in The Australian in Diplomatic state of uncertainty with “So much for a Mandarin-speaking Prime Minister. This is more like a shouted insult direct from Beijing, understandable in any language.” She had already made her comprehensive diagnosis: “...it is hard to overstate the significance for Australia of China's detention of Rio Tinto's employees, including Australian citizen Stern Hu, general manager of iron ore operations. This is an arrow shot into the heart of Australia's most vital trading relationship. It rips open the usual diplomatic cover of a polite and mutually beneficial political and economic relationship between the two countries. Rudd tried to defuse the growing tension and opposition accusations about government inaction by insisting in various radio interviews that it is best to regard it as ‘a consular case’ to be dealt with in a systematic way. As if. This is a full-blown, fast-moving crisis.”
But she went further with an explanation of the cause of the problem: “Rio Tinto angered the Chinese intensely last month by abandoning a proposed deal with Chinalco that would have seen Chinalco go from its present 9 per cent to 18 per cent of the company and take a stake in key assets such as Hamersley Iron. Although it was a commercial decision in the end, it was also obvious the Australian government had serious concerns about the implications and was delaying giving any approval or rejection to the deal until the last possible moment. But just as important, Rio Tinto, along with BHP Billiton, is also in the middle of fraught annual negotiations about iron ore prices.” So that was the genesis of her diagnosis. As it turns out, she was wrong, as diagnoses and causation so often are when only part of the information is available. But when you’re a journalist, you can take a punt; what matters if you’re wrong.
Next day, Paul Kelly, speaking on ABC’s Insiders said that “The Australian Government has been treated with contempt on this issue.” and “What it tells us is...that Kevin Rudd is under enormous pressure now. This is a diabolical challenge for both Kevin Rudd and Stephen Smith.” and “I think all those pressures will increase and it does come back to Kevin Rudd's claim that he has Chinese credentials, that he can deal effectively with the Chinese, and this is a major plus ... He now faces an enormous challenge now.” Although Kelly conceded early in the interview with Barrie Cassidy that “I think that this is very damaging for China's reputation...” Kelly’s diagnosis was that it was Rudd and the Australian Government that was under the pump.
The following day, Glen Milne decided to aim yet another poison arrow at Kevin Rudd in The Australian in Case calls for Kevin Rudd to ring his China plate. He began with “Absent a swift, open and just resolution to the Stern Hu case, Kevin Rudd now has a China problem. And it is largely one of his own making. Let us be clear here. Without the laying of serious charges against Hu, followed by a transparent and just trial process, China is in the wrong. Thus far this appears to be an unprovoked and unreasonable act that has the potential to open a significant diplomatic and trade rift between China and Australia.” So in a few sentences his diagnosis was that Rudd is largely responsible for the problem, yet ‘China is wrong’, and that its actions against Hu constituted an ‘unprovoked and unreasonable act’; in other words Hu was innocent. Pity the Chinese hadn’t read Milne – they could have called the whole thing off.
Milne ended: “What we are now witnessing is the harvest of Rudd's mismanagement of the China relationship, including the ambiguous signals he sent on the Chinalco deal. It has been a classic case of overreach and then apparent over-correction. If Rudd really knew anything about China it's that it is unsentimental in its foreign policy and business dealings. Beijing is entitled to expect that we say what we mean, and will act accordingly: consistently, coherently, and with maximum transparency. Rudd is fond of telling us of his phone conversations with heads of state. Now is the time for just such a conversation. If not for the sake of the bilateral relationship, at least for the sake of Stern Hu.” Q.E.D.. Pity Milne was wrong, again.
Since then we’ve had the unedifying spectacle of Malcolm Turnbull and Julie Bishop insisting that Rudd must pick up the telephone and talk directly with President Hu Jintao insisting on Hu’s immediate release. By today this had died down somewhat as many international experts agree with the Rudd Government’s measured approach, and today even Peter Costello in a piece in The Age, Doing business in China is not as we Westerners know it, does not call for Rudd to intervene. He concludes: “But it is also incumbent on our leaders to remember the differences when considering Australia's national interest. In sensitive foreign investment decisions, it's worth remembering that Chinese state-owned enterprises do not operate in the same way as our private corporations.” Coalition leader, please note.
Greg Sheridan, writing in The Australian on 13 July in Beijing ramps up the humiliation says: “Apart from the fact there is nothing in Hu's character to suggest criminal espionage as a sideline, it is inconceivable that after Rio had earned China Inc's fury for rejecting the Chinalco partial takeover bid, and in the middle of the tense iron ore price negotiations, the No2 Rio man in China would choose this time to run a criminal operation courting a lengthy jail term at best.” So Sheridan’s diagnosis was that Hu was ‘not guilty’. Maybe he’s right, but the only ‘evidence’ Sheridan uses is Hu’s ‘character’, and his own reasoning.
Today in The Australian Paul Kelly in a piece Mixed messages on China leave Kevin Rudd exposed first condemns the Opposition’s tactics: “The first thing Australia needs to forget is that populist, brainless, megaphone diplomacy can solve our problem. The idea that China's leadership will buckle and submit with a well-publicized phone call from Kevin Rudd is a touching flight from reality. As our former ambassador to China Ross Garnaut said, politicizing the issue by making it ‘a high-profile public event’ will make China more resistant.”
Kelly goes onto assert: “China is agitated over its recent commercial setbacks and unnerved over the Rudd government's inept foreign policy messages.” and “Rudd's misjudgements with China need to be kept in context; there is nothing to suggest the Rudd government is responsible for Hu's detention. Rudd's mistake has been to personalise the China relationship. It carries his imprint, his personality, his lofty aspirations and his deep suspicions of China's military intent. Because the policy is dictated almost totally by Rudd's personality, its policy foundations are uncertain and contradictory and expectations were raised far too high. This is the reason China is confused. It has every right to be confused.”
Does Kelly seriously believe that the Chinese government and its hundreds of apparatchiks are ‘confused’ by what he describes as ‘mixed messages’? Does his picture of officials scratching their head in confusion ring true? Are there none in China who can understand messages that are not in unison?
There have been many other reports in the media, many by minor reporters, with which I shall not bore you as they add little to our understanding.
Today Kevin Rudd has spoken publically warning that not only does Australia depend on trade with China, China depends on Australia. And he pointedly stated that the world was watching carefully how China handled this matter.
Then late today came the news in a Chinese English language newspaper China Daily, often used to get messages out to the Western world, and reported on ABC News by China correspondent Stephen McDonell in an item Chinese media says Rio bribed 16 steel mills. It says: “Rio Tinto staff tried to bribe executives from all 16 of China's major steel mills...If companies didn't accept, they would have cut supplies and so the whole steel industry has been bribed." According to the report “Mr Hu and three other Rio Tinto staff bribed executives from all 16 of these companies and in return the executives reportedly handed over sensitive industry information....Rio Tinto got to know the key executives of the 16 steel mills, who have sensitive industry information, when the China Iron and Steel Association brought them to the bargaining table," said a senior manager at a large steel company, who requested anonymity..., And then Rio Tinto bribed them (to get access to industry data), which has become an unwritten industry practice” The report concluded with a statement from China's Commerce Ministry Spokesman, Yao Jian, who said “China-Australia trade relations are strong and will not be harmed by the industrial espionage case.”
Now that we seem closer to the real nature of the allegations, what can we conclude about all the hype, conjecture, misinformation, and ill-considered opinion that have defaced the media coverage of this case in Australia? I’ll leave you to supply the adjectives.
More will come out, but don’t expect our media to treat it with the considered respect it deserves. It will be used, as usual, to fuel the biased pre-formed opinion of so many of our so-called journalists.
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