If foreign investors thought they need not concern themselves with the Chinese government's spotty record on basic rights, the Rio Tinto case might well be their wake-up call. Since July 5 2009, four of the Shanghai-based staff of the Anglo-Australian mining giant have been in jail, no doubt wondering how they will defend themselves against China's curiously slippery state secrets law.
The Rio Tinto employees, who include an Australian citizen, Stern Hu, have been accused of obtaining confidential documents during negotiations for the supply of iron ore to Chinese state-owned firms.
While the Chinese government has carried out a great deal of legal reform in the past decade, particularly as it prepared to join the World Trade Organisation in December 2001, less progress has been made towards a stable and predictable legal system. The Communist party is still uncomfortable with the idea that its judgment about the best interests of the state must bend to a real rule of law. The crime of disclosing state secrets is a near-perfect illustration of this attitude.