Australian prime minister Kevin Rudd on Wednesday stepped up pressure on China over detention of an Australian employee of Rio Tinto Ltd, the Anglo-Australian mining major, warning that the case was being closely followed by governments and companies all over the world.

The Australian government has expressed growing frustration over the Chinese government's unwillingness to share information about Australian national Stern Hu and three other employees of the firm who have been detained over allegations of stealing state secrets.

The Chinese government has alleged the employees are involved in espionage activities related to negotiations over the price of iron ore.

In a statement that is seen as his strongest yet on the detention, Rudd said both Australia and China have much at stake in the case. He said Australia had significant economic interests in its relationship with China, but sought to remind Chinese leaders that China too had significant interests at stake in the relationship with Australia.

According to some analysts, the detention of the Rio Tinto employees for espionage over what appears to be a commercial matter has effectively undermined China's recent claims about its state-owned enterprises' independence from government and their adherence to commercial principles.

Rudd warned that China's foreign trading partners and businesses operating in China would be following the developments in the case closely and that they would draw their own conclusions from the way it was conducted.

Earlier, Rudd and his left-leaning Labor government had preferred quiet diplomacy to elicit a better result than public grandstanding on the case.

Australia has not yet been officially apprised on the allegations against Hu.
 
International relations experts have meanwhile decried the Rudd government's strong rhetoric as an unfortunate policy misstep, which could damage relations between the two countries. They say the case needed to be dealt with quietly for an effective resolution.

Meanwhile, the case seems to have hit China's term price negotiations with global mining majors and, according to a consultant to the China Iron and Steel Association, it was not sure about how talks over prices could be concluded by the end of July.