China upholds ban on Australia's access to Rio trial

A receptionist checks an express mail at the Rio Tinto Limited Beijing Representative Office in Beijing March 19, 2010.

CANBERRA/SYDNEY (Reuters) - China has told Australian diplomats they will not be given access to part of the trial of an Australian employee of Rio Tinto charged with commercial spying, Canberra said on Friday.

Australia has registered its "disappointment" with Beijing over the ruling but will not make further attempts to allow officials access, the Australian Department of Foreign Affairs and Trade said.

The case threatens to re-ignite tensions, but Australian Trade Minister Simon Crean said earlier it would not damage trade relations.

"If there were links, you would have expected the trade had fallen, yet last year China became our largest trading partner The two matters are separate," Crean told Australian radio.

"We've never sought to make any link and neither have the Chinese in their discussions with us," Crean said.

The case caused friction between Australia and China in mid-2009 amid a drive among Chinese companies to buy more Australian raw materials, such as iron ore and coal.

Ties have since recovered, yet could again be soured depending on the outcome of the trial.

China arrested four Rio staff members, including Australian citizen Stern Hu, last July and will start their trial in Shanghai on March 22 on charges of bribery and stealing business secrets.

The trial will be open for hearing of bribery charges. But charges of infringement of commercial secrets will be held behind closed doors.

China is Australia's biggest trade partner, with trade worth $53 billion last year. Australia shipped $15 billion in iron ore to China in 2008, or 41 percent of Chinese iron ore imports.

But the Rio case has placed a cloud over contentious iron ore price negotiations underway between Chinese steel mills and the world's three largest iron ore miners: Rio, fellow Australian miner BHP Billiton and Brazil's Vale.

Rio's China team managed details of term contracts for iron ore, a necessary raw material for China's vast steel industry, as well as tracking market information.

Crean said Beijing could keep the trial completely separate from the delicate iron ore talks, despite pressure from Chinese steelmakers for Beijing to become involved in the negotiations.

"We've told them that we're not going to deal government to government. We recognized China as a market economy. We keep telling them they've got to act like one," he said.

"It's market forces that determine the price and I must say that there hasn't been a representation made to us by government recently."

Foreign journalists have so far been unable to get access to the trial, despite the fact that a portion, on the charge of accepting bribes, would be open.

The Shanghai Superior Court said on Friday morning that Reuters would be able to apply for access to the trial, but by afternoon referred inquiries to the Intermediate Court, where the trial is being held.

The office in charge of processing applications in the Intermediate Court did not answer repeated phone calls on Friday, while its fax machine was turned off.

(Additional reporting by Rujun Shen in Shanghai, and Lucy Hornby in Beijing.)