By John Garnaut
THE Trade Minister, Simon Crean, has told China to behave like the "market economy" it says it wants to be, as he linked the arrest of Rio Tinto executive Stern Hu to the Chinese Government's efforts to control the iron ore trade.
His comments, made in Anhui province, central China, came as BHP Billiton and Rio Tinto quelled rumours that members of their Shanghai offices had been pulled out of China. Both companies said it remained "business as usual".
Mr Crean said the China relationship was "very good" as he delivered the Rudd Government's first gentle chiding of China since its Ministry of State Security arrested Mr Hu and Chinese colleagues 10 days ago for allegedly bribing steel mills and stealing state secrets.
"China sought and attained from Australia some years ago recognition of them as a market economy and, therefore, they have to operate as one when it comes to international trade," Mr Crean told journalists at a car factory in Anhui. Asked whether this marked the end of the 40-year benchmark contract system for trading iron ore, he said: "That's a commercial decision. The Government doesn't determine the price of iron ore."
But the future of the iron ore negotiations with China remain uncertain, with Rio Tinto's top four China marketing staff now locked in the Shanghai Detention Centre and mining companies uncertain whether more arrests will follow.
Mr Crean hinted at the real politik limitations of how far Australia could push China, since Australia's economic fortunes are now so closely tied to those of China.
"They're still growing, we are still growing the best of the developed countries, the opportunities are enormous," he said.
"We've got to deal with these differences and not be deterred from the overall strategy."
Mr Crean was spruiking opportunities for Australia's struggling vehicle components manufacturers to supply China's car making industry, which overtook the US to become the world's largest four months ago.
Chinese media reports say steel executives have been detained and investigated at a range of steel mills across China.
But Mr Crean claimed the surprise arrest of Mr Hu, prominently reported around the world, was only a "hiccup" in the economic relationship between the nations.
"I think the state of the Australia-China relationship is very good. It continues to go from strength to strength," he said.
"All relationship are going to have hiccups from time to time. This is a hiccup. It is in both Australia's and China's interests to continue to strengthen the economic relationship."
But he was "frustrated" with China's reluctance to release details about what Mr Hu and his staff were alleged to have done.
"We've made lots of urgings … obviously [about] the welfare of the individual, consular access, access to the family, legal representation but also clearer and fuller details of what's involved," he said. "All of us would like that."
Mr Crean said he had not been snubbed when China presented the 16th-ranked member of the Shanghai municipal government on Saturday to hear Australia first convey its "strong concern".
"We're trying to address it front on and make the representations at the level which we thought appropriate," Mr Crean said.
Neither the Australian Government nor Rio have been able to contact the three Chinese staff.
Asked whether the detention of Mr Hu had caused panic among Australian business people in China, Mr Crean said "that's certainly not a view that has been expressed to me".