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Stern Hu admits taking bribes

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Mar. 22nd, 2010 | 07:28 pm

http://www.abc.net.au/news/stories/2010/03/22/2852973.htm

When the story was first breaking in July last year, I made this post.
"Look at it from a Chinese perspective. Currently contracts signed last year between the Chinese government and Rio, prior to the GFC, for $billions of ore are being renegotiated. Rio gave the Japanese and the Koreans a 33% discount and want to give the Chinese the same. The Chinese want 40%. The difference is thus something like 7% of $5-9bn or about $300-600m dollars. From the Chinese administration's point of view the corporate leaders of an exceedingly wealthy, economically stable nation of 20m people, occupying a landmass comparable to that held by China's 1.5bn inhabitants, are ransoming China its economic development, squeezing them for a few extra percent on the price of the most basic raw materials. Every day our newspapers proclaim the wondrous soft landing we've had after the crash of last year, all thanks to China's continued economic growth. Is this heroic commercial brinkmanship, or imperialism? Couldn't it be argued that the Chinese customers of Rio Tinto should be grasping at whatever levers might help them?

The results of the deals done by the likes of Rio Tinto are visible everywhere in the increased wealth of Perth. These deals fund our canal developments and sunken railways via mining royalties, bankroll a hundred thousand suburban soufflé homes via inflated salaries. But the economic midwives like Stern Hu aren't heroes or saints, they're operators who know the risks and consequences well and reap rich rewards.
We don't know whether the admission is truthful, or coerced, or part of a package deal. This is what the ABC report says:
"A report on the Bloomberg wire service citing one of the defence lawyers says Hu and one of his co-accused, Liu Caikui, have pleaded guilty to accepting bribes but will contest the amounts they received.

Consul General Tom Connor, who was observing today's trial, says this is at least partly true.

The former head of Rio Tinto's Shanghai-based iron ore negotiating team is said to have received around $1 million in bribes.

In court today his colleague Ge Mingqiang was accused of receiving a similar amount and Caikui about half as much.

But the fourth executive charged, Wang Yong, is said to have accepted more than $10 million in bribes."


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