Australia PM says caution needed on China spy case

SYDNEY, July 10 (Reuters) - Australia is adopting a cautious approach to dealing with Chinese allegations of spying against Shanghai-based staff of Anglo-Australian miner Rio Tinto (RIO.AX) (RIO.L), Prime Minister Kevin Rudd said on Friday.

"As with all complex consular cases, we have to proceed cautiously on the basis of the advice as it unfolds," Rudd said in an interview broadcast by state radio ABC. He was speaking from Italy where he was attending the G8 summit.

Chinese authorities arrested four Rio Tinto employees, including the group's top iron ore salesman in China, on Sunday, alleging they were involved in stealing state secrets. The affair has cast a shadow over Australia-China relations.

(Reporting by Mark Bendeich; editing by Jonathan Standing)