Now this is all confusing. Did he Take Bribe or Give bribe? Who are the takers/givers of this so called bribing for industrial espionage? For bribing to happen, there has to be 2 parties. Where is the other party? Are they being prosecuted too?
Everyone knows corruption is part and parcel of big business dealings in China. Why is there so much focus on this one case?
Is there something else to the story than just bribes??? I feel the underlined sentence above has some relevance to this story.
There is no much information available in the Chinese media on this.
I hope some can clarify all this.
This article is nearly a year old but its a good starting point and will add some perspective. It is very confusing and i guess people and the business world can only speculate what happens behind closed court room doors.
Stern Hu – lessons for the rest of us.
The recent news of the detention of a Rio Tinto executive has repercussions for everyone doing business with China.
The facts of this particular case are not clear, not even to the accused himself, so we can’t comment on the rights and wrongs or the potential outcome.
But there are some extremely worrying elements to this case.
* For individuals doing business in China, how do we (I include myself) find the fine line between fulfilling obligations of Guanxi and mianzi without stepping across indistinguishable boundaries of law? Should we offer gifts, or accept them? It’s a common practice in China, and an expectation from many Chinese business executives that they should receive honours in the form of gifts. If I give a gift and receive some favour, do I then face the possibility of jail if I subsequently fail to complete the deal?
* For Rio, how do they now go forward? Put yourself on the board of Rio. If the company is found to have entered into some improprieties or even to have broken the law, how long will it take before they can deal with the Chinese again? And who will do it? Regardless of whether he is guilty or innocent, Stern Hu’s career is now finished. Should he be released, he will no doubt end up in a nice office in Brisbane or Singapore, but will never do business with China again. So the Rio management must tap someone on the shoulder and send them to Shanghai….. to do what? Replacing Stern Hu is a monumental task even without these accusations. Without the accusations being resolved, Rio is hamstrung. Since the presumption of innocence doesn’t apply in China, and since the authorities have said they have compelling evidence against Hu, Rio will find it extremely difficult to do iron ore (and perhaps other) business in China for years or possibly decades to come.
* Consider BHP Billiton and other major corporations. The clear threat to them is that the failure to accede to a negotiated price could lead to their executives landing in jail. Not to mention that right now, they are probably (or should be) scouring their internal practices and people to check for any sign of indiscretion, largesse or activity which could be construed as detrimental to China’s interests.
* Consider the position of the Australian Government. Because this case is outside the norms of the Australian legal system, there is a public call for the government to intervene somehow. “Pick up the phone”, is the cry from many politicans and commentators there. They want the Prime Minister to exercise his special relationship with China, to see to getting this man released. But it has now emerged that President Hu Jin Tao himself was aware of and gave approval to the investigation and subsequent detainment of Mr Hu. So who does the Australian Prime Minister call? And what does he offer in return for getting this man released? And what does he even say to President Hu, given that the Chinese are not revealing any information about the case? Chinese law prevails, but Chinese law is not the only driving force behind this action. Clearly the Chinese are hurt and angry by the aggression of the iron ore suppliers, and have set out on a campaign of revenge and retaliation.
* Consider the implications for China itself. China has insisted that State Owned Corporations are autonomous, but to charge that the obtaining of sensitive commercial information is a State matter and amounts to espionage, is to put the lie to the Chinese claims. With President Hu involved, it means that China is prepared to risk their reputation, strategic positions and their future on this case.
* Consider Hu Jintao’s presence in the case. It has been long known that President Hu is a conservative. His actions over things like the control of the internet and the media have illustrated this, not to mention his purging of more radical elements in his early years. Taking a position in this case reveals his hand in the future direciton of the country in ways which I doubt we will fully understand for many years.
* Consider the situation regarding Mr. Hu’s nationality. Stern Hu was born in China, but forsook his Chinese passport for Australian citizenship about 10 years ago. But here in China, some ratbag elements are calling him a traitor, considering him to be Chinese first, Australian second. The essential difference between China and many other countries is that it is a “civilization-based” nation, where most of the rest of the world are state-based nations. I can become a Canadian, or American, or German, or other nationality by going through due processes and allowing sufficient time. But I can never become Chinese. I may be granted citizenship, but that is not the same as being part of the Han race. Even now, the Chinese Government has an active program running where foreign-based Chinese are being enticed back to the motherland, regardless of their citizenship.
* Consider the position of other major corporations employees of Chinese ethnicity. This is a clear threat to them not to put the interests of their employers above those of China. It matters not their nationality. they remain Chinese, in the eyes of China.
China has long been primarily interested in what is good for China. That is true for all countries, but what makes China different is that it is a quarter of the world’s population, with a growing appetite for resources, food, water and especially energy, and it is ruled by a totalitarian regime with an agenda which maybe only now the world is beginning to see and understand.
I suspect the board rooms and strategic management offices of corporations and governments around the world are watching, very quietly, to see how this case resolves itself.
Stern Hu – lessons for the rest of us. Black China Blog
