Australia's prime minister has warned China that its handling of the case of four mining executives accused of corporate espionage is being closely watched by the rest of the world.

Kevin Rudd said China should bear in mind that it has significant economic interests at stake in the case, both in terms of relations with Australia but with other trade partners as well.

"Australia of course has significant economic interests in its relationship with China, but I also want to remind our Chinese friends that China too has significant economic interests at stake in its relationship with Australia and with its other commercial partners around the world," Rudd said on Wednesday.

The arrest last weekend of the four employees from Anglo-Australian mining giant Rio Tinto has strained relations between China and Australia.

According to Chinese officials, the four stole "state secrets" by bribing Chinese workers to obtain confidential information on China's negotiating position in iron ore price talks.

China's foreign ministry said the case was seen as "gravely harming China's economic interests and economic security".

One of the four detained Rio Tinto employees is an Australian citizen, Stern Hu.

If convicted of spying, analysts say he could face a maximum penalty of life in prison.

Commenting on the case, Rudd said he would if necessary Chinese press officials in the highest levels of government for information about Hu's detention and the charges against him.

Opposition criticism

Rudd was speaking amid growing criticism from Australian opposition politicians regarding his government's handling of the case.

Defending his response, he said Australian officials were "engaged with the Chinese on elements of this entire matter."
 

Rio Tinto is the world's third-largest mining company [EPA]

Earlier, speaking to local radio, Rudd said that he had spoken to an unnamed Chinese vice foreign minister about the Hu case when he was in Italy last week for the G8 summit.

Stephen Smith, Australia's foreign minister, previously said Chinese officials have not been forthcoming with details of why Hu was detained.

Australian diplomats met Hu last week and said he is in good health but have been told they will not be able to see him again for a month.

The opposition claims the government is not doing enough to help Hu.

Consular agreement

Julie Bishop, the opposition foreign affairs spokeswoman, said on Wednesday that China is not abiding by a consular agreement it signed with Australia in 2000.

"I have read the agreement, and it says China shall inform the consular post, that is Australia, of the reasons why an Australian citizen has been arrested or detained," she told local radio.

"As far as I'm aware the Chinese government has not informed [Stephen] Smith or the Australian government of the reasons why Mr Hu has been arrested and detained."

China is Australia's second-largest export customer behind Japan, and more than half of China's imports from Australia last year were of iron ore.

Rio Tinto, based in London and Australia, is the world's third-largest mining company and one of China's biggest suppliers of iron ore.

Last month it ditched a planned $19.5bn investment by state-owned Chinese metals firm Chinalco, and there has been speculation in Australia that the arrests may be in reprisal for the collapsed deal

The deal with Chinalco would have been one of the largest ever foreign investments by a Chinese company.