In China, four Rio Tinto employees were sentenced in Shanghai to prison terms for accepting bribes equal to about US$13 million and stealing trade secrets. Stern Hu, the one Australian (a nationalized Chinese), was sentenced to 10 years in prison, while his three Chinese colleagues were imprisoned for between seven and 14 years.
When the case was first announced nearly a year ago, foreign companies began to watch nervously in fear that the Chinese environment for foreign companies was becoming more closed to them, preferring instead domestic businesses. Chris Bowen, Australia’s minister for financial services, said on local television last July, “It should also be a concern for the Chinese government that if foreign businesses feel that their degree of uncertainty is high, it will change the way that foreign businesses around the world approach business in China.” In this case, rulings could suggest that China’s leaders are beginning to apply the country’s corruption code – although it is inconsistently enforced.
In fact, both the Australian and the American business communities announced surveys indicating constituents are feeling less confident in business opportunities for them, in some cases pointing to government policies protecting domestic technologies over foreign developed ones. Some companies are nervous about basing their executives in China due to uncertain regulations.
Yet within the last six months, Australia has managed to sign two major gas deals with China, most recently agreeing to a $54 billion contract to provide liquefied natural gas to China National Offshore Oil Corporation (CNOOC). This leaves viewers wondering whether this time, the Chinese legitimately sentenced corruption charges – and the foreign business community has reacted, in paranoia, as though this were business as usual. Australian Resources and Energy Minister Martin Ferguson interprets this deal to indicate that business ties with China – for Australia, at least – continue as strong as ever.
Originally published in the Booming Beijing blog for the Engineering News-Record.