China formally arrests four Rio Tinto employees

China has formally arrested four employees of Australian mining giant Rio Tinto on charges of trade secrets infrigment and bribery, a downgrade from more serious claims of espionage.

Preliminary investigations showed that four employees, including Australian citizen Stern Hu, had obtained commercial secrets of China's steel and iron industry through improper means, which had violated the country's criminal Law, official Xinhua news agency reported, quoting a statement from the Supreme People's Procuratorate.

Prosecution authorities also found evidence to prove that they were involved in commercial bribery, the statement said, adding that the investigations have also revealed that there were suspects in China's steel and iron enterprises who were providing commercial secrets for them.

The four were detained in Shanghai in early July on charges of stealing China's state secrets.

In Melbourne, Australian officials said the government is yet to receive formal advice on the charges and is using diplomatic channels to find out if the reports are true.

Australian diplomats had their second consular visit with Hu late last week and reported that he was in good health.

Stern Hu, an Australian citizen of Chinese origin, was general manager of the company's Shanghai office and was in- charge of the iron ore business in China.

Rio Tinto had no immediate response to the report, but it had earlier said that the four detained employees did nothing improper.

Xinhua said that in recent days Chinese steel executives have also been formally arrested on suspicion of "providing commercial secrets" to Stern Hu.

Australian foreign affairs minister Stephen Smith had yesterday said Hu was well and played down accusations from the Chinese state secrets agency that Rio Tinto had been spying on Chinese steel companies for six years.