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Rights & responsibility

(China Daily)
Updated: 2009-07-16 07:50

Last week's detention of four employees of Rio Tinto's China operations must have further dramatized the iron ore price negotiations between China and global mining giants which have already been particularly contentious this year.

The case came right after the intense negotiations - between China's steel industry and Australian and Brazilian iron ore producers over the price cut for 2009-2010 contracts - passed the traditional June 30 deadline.

The sensitiveness of the timing has made it difficult to put in perspective such a case of industrial espionage. Some foreign observers had thus misread the case as an unfair tactic for negotiation or a sort of discrimination against foreign businesses.

However, as the Chinese authorities keep widening the investigation among domestic steel makers into alleged leakage of State secrets, their determination to crack down on commercial corruption has become all too clear now.

Soon after Stern Hu, a general manager for the Chinese operations at Rio Tinto's iron ore division, as well as three other employees at the mining company were detained on July 5 for alleged spying, the Chinese government has been forthright. It pointed out that sufficient evidence exists to show that these people committed acts of espionage and stole State secrets; and their acts were responsible for huge losses to China's economic and security interests.

And now, it is reported that the Chinese authorities have extended the probe to leading domestic steel makers and officials from the industry association to identify the bribe-takers.

Such an investigation will not have a negative impact on China's long-term commitment to protect the legitimate rights of foreign companies doing business in or with the country.

On the contrary, the investigation sends the important message that, as the Chinese government works hard to clean up the domestic business environment, both foreign companies and their Chinese counterparts should accept the responsibility of abiding by Chinese laws and regulations.

For many years, a large number of foreign companies have successfully shared the remarkable growth story of the Chinese economy through investment and trade.

To improve its commercial climate for sound and sustainable economic growth, China has now made the fight against commercial corruption a top priority.

This is actually a good cause for foreign companies to shore up confidence in the Chinese economy. Fair competition will boost economic growth to create more business opportunities.

(China Daily 07/16/2009 page8)