China, Australia threaten each other on Rio Tinto bribery case

Both Australia and China have issued veiled threats to each other over the Rio Tinto bribery case as well as the ongoing annual iron ore contract negotiations, which has drawn international attention on multinationals operating in China.

Australian trade minister Simon Crean has warned China that its trade relations could be damaged if the Rio Tinto bribery case was not handled judiciously and asked China to be more open about the charges that led the country to detain the four Rio executives earlier this month. (See: China arrests four Rio Tinto employees)

Crean said that China needs to make clearer the allegations, and if they warrant charges to be made, it should do so soon to ease the speculation and uncertainty.

His response came even as China dropped charges of espionage and said that it was conducting th einvestigation related to bribery charges only.

The trade minister's warning comes a week after the Australian Prime Minister Kevin Rudd also issued a warning saying that the case was being closely followed by governments and companies all over the world. (See: Rudd warns China over Rio Tinto detention)

Rudd also issued a veiled threat telling China that it had "significant" business interests on the line in Australia. China is Australia's biggest trade partner, with 2008 bilateral trade being $53 billion with iron ore exports contributing $14 billion - significant because China is the biggest investor in Australian natural resources.