Rio arrest not good for business: Aussie minister

MELBOURNE; China's arrest of a top Rio Tinto executive on suspicion of spying may change the way foreign firms approach doing business with Beijing, an Australian minister has said.

Financial Services Minister Chris Bowen said the business world was concerned about Australian passport holder Stern Hu's arrest and its implications for dealings with China.

"The Chinese government will be very aware that it is not good for business certainty," Bowen told Channel 10 television.

"It is a concern for Australian and other foreign business people working in China that this could happen.

"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."

Hu, the head of Rio's Shanghai office, was arrested last Sunday on suspicion of espionage and stealing state secrets.

Beijing claims he bribed staff at Chinese steel companies during protracted iron ore price negotiations.

Australian officials met with Hu on Friday and have urged China to deal expeditiously with Hu's case.

Employment Minister Mark Arbib denied that Canberra was reluctant to raise the case more forcefully with Beijing because of China's status as Australia's number two trading partner.

"It shouldn't matter what our relationship is in terms of trade, all Australians who are overseas and in trouble should be getting appropriate action from the government, and that is what we're doing," he told Channel Nine.

Former Rio suitor, China's state-owned Chinalco, has denied Hu's arrest was payback for the collapse of its 19.5-billion-US-dollar bid to lift its stake in the mining giant.

Rio, the world's third-largest miner, has also spearheaded difficult talks with China to set iron ore prices for the coming year, with negotiators missing a key deadline on June 30.