CANBERRA will advise investors to 'fully understand' China's legal system before doing business there. James Peng Jiandong's trial had shown a lack of transparency in the system, the Australian Government said. Investors were concerned about Peng's case, according to Paul Molloy of the Department of Foreign Affairs and Trade. Chinese-Australian Peng yesterday lost his appeal against an 16-year sentence for graft. 'The case raises concern in the minds of potential Australian and foreign investors as to fair and transparent treatment when they have disputes with their Chinese partners,' said Mr Molloy. China and Australia had 'broad relations', based on 'trade, culture, education, political aspects and co-operation in wide areas', he said. Canberra would not judge relations based only on Peng's case. Alfred Croucher, Secretary-General of the Australian Chamber of Commerce in Hong Kong, said the case would not hurt investor confidence, as they abided by Chinese law, he said. But Mr Croucher added the case did reveal disturbing factors concerning the transparency of the legal system and rule of law. 'Mr Peng appeared to be arrested by the Chinese Government on foreign territory and was taken to China not according to either China or Macau's law and his detention exceeded the statutory time before he was sent to court. 'The chamber will seek assurances from the Chinese Government that treatment of foreign businessmen should be according to the letter of the law,' he said. The Hong Kong Government last night took the unusual step of responding to the verdict. 'Mr Peng's case has been a matter of concern in the community ever since he was detained: concern about the manner in which he was detained; concern about the length of his detention before the judicial processes were completed; concern about the implications for Hong Kong residents doing business in China. 'The British and Hong Kong governments have raised this case on various occasions with the Chinese authorities. Most recently, the Foreign Secretary did so during the visit of Vice-Premier Qian [Qichen] to the UK in October. 'Today's news will do nothing to allay the concerns which have been expressed, and is very disappointing.' The Hong Kong Government understood Canberra had requested Peng be deported without delay, and it believed 'in the circumstances this would be a welcome outcome'. 'We do not want to say any more . . . which might complicate decisions for Mr Peng, his family, and the Australian Government.'