East and West meet a little less comfortably after Rio Tinto arrests

News of the detention of four employees of Rio Tinto, the Anglo-Australian mining giant, has justifiably sent chills down the spines of mainland-based executives working for not only multinational mining groups, but any overseas firm operating on the mainland.

It is likely to prompt foreign companies to rethink how they do business there, and how their executives go about their daily business routines.

Indeed, many executives at foreign companies in Beijing have swapped bitter jokes about what can be said in the office, over fixed telephone lines or mobile phones, in e-mails or even at home.

Some have already begun to encounter subtle difficulties in their communications with government officials and mainland clients, who are less forthcoming in phone conversations or show unwillingness to meet up for drinks or meals.

Mainlanders working for those multinationals are feeling particularly vulnerable - with good reason. The four Rio Tinto employees, arrested in Shanghai two weeks ago, were three Chinese nationals and Stern Hu, an Australian passport holder and general manager of Rio Tinto's iron-ore business in China. Mr Hu was born in Tianjin and studied at Peking University before he went to study in Australia and gained Australian citizenship.

Mr Hu and the other three were arrested on suspicion of 'stealing Chinese state secrets for foreign countries', and state media also accused them of bribing steel-mill officials during the iron-ore negotiations.

On Friday, Rio issued its strongest reaction yet, categorically denying claims its employees had bribed steel-mill officials. But the fact that Mr Hu and the three others were arrested by the Shanghai branch of the secretive Ministry of State Security means mainland officials must have hard evidence implicating the four.