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Conspiracy theories abound in the Stern Hu arrest case

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Tom Holland

'It is a riddle wrapped in a mystery inside an enigma.'

Winston Churchill's comment on Russian policy could equally apply to the Chinese government's decision-making process in the Stern Hu case.

Mr Hu, the general manager of mining company Rio Tinto Group's Chinese operations, was arrested nearly four weeks ago by the Shanghai arm of the Ministry of State Security along with three colleagues.

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Given that Mr Hu is an Australian citizen and that his detention came as tense negotiations between Rio and Chinese steel mills over iron ore prices neared their climax, the arrest inevitably caused an almighty row.

But the reason Mr Hu was arrested remains unclear. The official explanation, that he is suspected of 'stealing Chinese state secrets', doesn't tell us much. On the mainland, the definition of a state secret is extremely flexible. Essentially, it's whatever the authorities decide, even if that decision is retrospective

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The general assumption is that Mr Hu had been collecting information about the order books and operating margins of Chinese steel companies; information that would be valuable to Rio in its negotiations. And there have been allegations that he bribed steel company executives to obtain it.

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