Media flounders over the Hu affair

Those who seek to understand the intricacies of the Hu affair and its implications for this nation could be excused for being cynical and disappointed at the media’s efforts to inform us.  It has floundered around with little purpose, insight or even native intelligence.  Its craving to create arresting stories has overridden the need to get the facts right, and has blinded it to the hazard of conjecture and the danger of expressing opinions without supporting evidence.  It is only now that some hard data has emerged that enlightens this convoluted case. [more]

Although Stern Hu, a Chinese-born Australian citizen, and head of Rio Tinto’s iron ore operations in China was detained on 5 July, nothing much emerged in the press until 10 July when it was reported that he had been detained on suspicion of stealing state secrets related to iron ore pricing.  Commercial intelligence and ‘state secrets’ seem to be one and the same if Chinese authorities say so.  The Foreign Minister Stephen Smith said he was ‘perplexed’ and was finding it hard to get information from Chinese authorities.

Despite there being only fragmentary information available that precluded informed analysis of the case, the very next day, Jennifer Hewett was sounding off in The Australian in Diplomatic state of uncertainty with “So much for a Mandarin-speaking Prime Minister. This is more like a shouted insult direct from Beijing, understandable in any language.”  She had already made her comprehensive diagnosis: “ is hard to overstate the significance for Australia of China's detention of Rio Tinto's employees, including Australian citizen Stern Hu, general manager of iron ore operations. This is an arrow shot into the heart of Australia's most vital trading relationship. It rips open the usual diplomatic cover of a polite and mutually beneficial political and economic relationship between the two countries. Rudd tried to defuse the growing tension and opposition accusations about government inaction by insisting in various radio interviews that it is best to regard it as ‘a consular case’ to be dealt with in a systematic way.  As if. This is a full-blown, fast-moving crisis.”

But she went further with an explanation of the cause of the problem: “Rio Tinto angered the Chinese intensely last month by abandoning a proposed deal with Chinalco that would have seen Chinalco go from its present 9 per cent to 18 per cent of the company and take a stake in key assets such as Hamersley Iron. Although it was a commercial decision in the end, it was also obvious the Australian government had serious concerns about the implications and was delaying giving any approval or rejection to the deal until the last possible moment.  But just as important, Rio Tinto, along with BHP Billiton, is also in the middle of fraught annual negotiations about iron ore prices.”  So that was the genesis of her diagnosis.  As it turns out, she was wrong, as diagnoses and causation so often are when only part of the information is available.  But when you’re a journalist, you can take a punt; what matters if you’re wrong.

Next day, Paul Kelly, speaking on ABC’s Insiders said that “The Australian Government has been treated with contempt on this issue.”  and “What it tells us is...that Kevin Rudd is under enormous pressure now. This is a diabolical challenge for both Kevin Rudd and Stephen Smith.” and “I think all those pressures will increase and it does come back to Kevin Rudd's claim that he has Chinese credentials, that he can deal effectively with the Chinese, and this is a major plus ... He now faces an enormous challenge now.”   Although Kelly conceded early in the interview with Barrie Cassidy that “I think that this is very damaging for China's reputation...”  Kelly’s diagnosis was that it was Rudd and the Australian Government that was under the pump. 

The following day, Glen Milne decided to aim yet another poison arrow at Kevin Rudd in The Australian in Case calls for Kevin Rudd to ring his China plate.  He began with “Absent a swift, open and just resolution to the Stern Hu case, Kevin Rudd now has a China problem. And it is largely one of his own making.  Let us be clear here. Without the laying of serious charges against Hu, followed by a transparent and just trial process, China is in the wrong. Thus far this appears to be an unprovoked and unreasonable act that has the potential to open a significant diplomatic and trade rift between China and Australia.”  So in a few sentences his diagnosis was that Rudd is largely responsible for the problem, yet ‘China is wrong’, and that its actions against Hu constituted an ‘unprovoked and unreasonable act’; in other words Hu was innocent.  Pity the Chinese hadn’t read Milne – they could have called the whole thing off. 

Milne ended: “What we are now witnessing is the harvest of Rudd's mismanagement of the China relationship, including the ambiguous signals he sent on the Chinalco deal. It has been a classic case of overreach and then apparent over-correction. If Rudd really knew anything about China it's that it is unsentimental in its foreign policy and business dealings. Beijing is entitled to expect that we say what we mean, and will act accordingly: consistently, coherently, and with maximum transparency.  Rudd is fond of telling us of his phone conversations with heads of state. Now is the time for just such a conversation. If not for the sake of the bilateral relationship, at least for the sake of Stern Hu.”  Q.E.D..  Pity Milne was wrong, again.

Since then we’ve had the unedifying spectacle of Malcolm Turnbull and Julie Bishop insisting that Rudd must pick up the telephone and talk directly with President Hu Jintao insisting on Hu’s immediate release.  By today this had died down somewhat as many international experts agree with the Rudd Government’s measured approach, and today even Peter Costello in a piece in The Age, Doing business in China is not as we Westerners know itdoes not call for Rudd to intervene.  He concludes: “But it is also incumbent on our leaders to remember the differences when considering Australia's national interest. In sensitive foreign investment decisions, it's worth remembering that Chinese state-owned enterprises do not operate in the same way as our private corporations.”   Coalition leader, please note.

Greg Sheridan, writing in The Australian on 13 July in Beijing ramps up the humiliation says: “Apart from the fact there is nothing in Hu's character to suggest criminal espionage as a sideline, it is inconceivable that after Rio had earned China Inc's fury for rejecting the Chinalco partial takeover bid, and in the middle of the tense iron ore price negotiations, the No2 Rio man in China would choose this time to run a criminal operation courting a lengthy jail term at best.”   So Sheridan’s diagnosis was that Hu was ‘not guilty’. Maybe he’s right, but the only ‘evidence’ Sheridan uses is Hu’s ‘character’, and his own reasoning.

Today in The Australian Paul Kelly in a piece Mixed messages on China leave Kevin Rudd exposed first condemns the Opposition’s tactics: The first thing Australia needs to forget is that populist, brainless, megaphone diplomacy can solve our problem. The idea that China's leadership will buckle and submit with a well-publicized phone call from Kevin Rudd is a touching flight from reality. As our former ambassador to China Ross Garnaut said, politicizing the issue by making it ‘a high-profile public event’ will make China more resistant.”  

Kelly goes onto assert: “China is agitated over its recent commercial setbacks and unnerved over the Rudd government's inept foreign policy messages.” and “Rudd's misjudgements with China need to be kept in context; there is nothing to suggest the Rudd government is responsible for Hu's detention. Rudd's mistake has been to personalise the China relationship. It carries his imprint, his personality, his lofty aspirations and his deep suspicions of China's military intent.  Because the policy is dictated almost totally by Rudd's personality, its policy foundations are uncertain and contradictory and expectations were raised far too high.  This is the reason China is confused. It has every right to be confused.”

Does Kelly seriously believe that the Chinese government and its hundreds of apparatchiks are ‘confused’ by what he describes as ‘mixed messages’?  Does his picture of officials scratching their head in confusion ring true?  Are there none in China who can understand messages that are not in unison?

There have been many other reports in the media, many by minor reporters, with which I shall not bore you as they add little to our understanding.

Today Kevin Rudd has spoken publically warning that not only does Australia depend on trade with China, China depends on Australia.  And he pointedly stated that the world was watching carefully how China handled this matter.

Then late today came the news in a Chinese English language newspaper China Daily, often used to get messages out to the Western world, and reported on ABC News by China correspondent Stephen McDonell in an item Chinese media says Rio bribed 16 steel mills It says: “Rio Tinto staff tried to bribe executives from all 16 of China's major steel mills...If companies didn't accept, they would have cut supplies and so the whole steel industry has been bribed."  According to the report “Mr Hu and three other Rio Tinto staff bribed executives from all 16 of these companies and in return the executives reportedly handed over sensitive industry information....Rio Tinto got to know the key executives of the 16 steel mills, who have sensitive industry information, when the China Iron and Steel Association brought them to the bargaining table," said a senior manager at a large steel company, who requested anonymity..., And then Rio Tinto bribed them (to get access to industry data), which has become an unwritten industry practice”  The report concluded with a statement from China's Commerce Ministry Spokesman, Yao Jian, who said “China-Australia trade relations are strong and will not be harmed by the industrial espionage case.”

Now that we seem closer to the real nature of the allegations, what can we conclude about all the hype, conjecture, misinformation, and ill-considered opinion that have defaced the media coverage of this case in Australia?  I’ll leave you to supply the adjectives.

More will come out, but don’t expect our media to treat it with the considered respect it deserves.  It will be used, as usual, to fuel the biased pre-formed opinion of so many of our so-called journalists.

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Paul of Berwick

15/07/2009If only our journalists were familiar with Geert Hofstede, Fons Trompenaars, Stuart Hall, et al. Then we would get more reasoned arguments by the journalists in the MSM. Sigh!


16/07/2009Jennifer Hewett's latest piece of trash here.,25197,25788837-5013404,00.html This is why I don't bother reading this tripe, it just gets you annoyed. No matter what Rudd does, it will be not enough or to much, over played, over stretched, under achieved, to soft, to combative and so on and so forth. So far Rudd has played a straight bat and is handling the situation well, IMHO. Thanks Ad for another fine piece. Cheers Eb

Sir Ian Crisp

16/07/2009Ad Astra, this 'Hu' article by you is a very, very disappointing piece of blogging. Millions of your fans around the world must be, like me, wondering why you have allowed your very high standards to slip. I give you a C+...can do better. Very, very disappointing.

Ad astra reply

16/07/2009Paul of Berwick, I wonder how many journalists know of Geert Hofstede and his work on culture, Fons Trompenaars’ work on cross-cultural communication and Stuart Hall’s work on textual analysis. It seems that many are superficially trained, or institutionally inhibited in applying their training. The incapacity of so many to establish all the facts accurately, to transmit them truthfully, to formulate opinion logically, to separate fact from opinion, and to avoid bias, renders much of what they write uninformative and unenlightening. Eb, I read Jennifer Hewett’s piece with amazement. It seems as if she is determined to shaft Rudd, no matter what he does. So at 11.34 am today I submitted the following, but it is not yet posted: [quote]” I'm mystified. What do you believe Kevin Rudd should do? In your July 11 piece you expressed doubt about the appropriateness of his desire to deal with the Hu matter 'in a systematic way', with the words: "As if. This is a full-blown, fast-moving crisis." Today, your heading "PM's harsh tone may misfire" suggests you consider Rudd's move yesterday to be unwise. You reinforce that view with the words: "The rhetoric is more likely to further irritate the Chinese than it is to persuade them to change course over the imprisonment of Stern Hu." Your words create the impression that you understand the nuances of this complex problem, even better than does the PM. Could you do your readers a favour? Please advise us, and our PM, exactly how this matter should be handled. Tell us what moves by Rudd would meet with your approval and bring forth your admiration.”[/quote] Sir Ian, You’re back, and with a disappointing C+ assessment of my last piece. Since about half of the words were direct quotes of the journalists in question, I presume it was my words that attracted your disapproval. As a simple grade is not all that helpful as feedback, you might care to narrate some of the defects of the piece.

Ad astra reply

16/07/2009Eb, This is what Richard Farmer had to say in [i]Crikey[/i] about the Hewett article this morning: [quote]"What a difference a day or two makes. On Monday in The Australian they were urging Kevin Rudd, in quite an hysterical fashion, to start talking tough to the Chinese Government on behalf of the wrongly imprisoned Rio Tinto executive Stern Hu. This morning the paper's national affairs correspondent Jennifer Hewett is cautioning that the moderate words Mr Rudd did utter on the subject yesterday "will make it even harder for any possible resolution to be quietly negotiated through diplomatic channels."[/quote] It's not possible to please Ms Hewett.


17/07/2009The OO has come up with two more 'gotcha' pieces to create a furore. With the word 'Exclusive' written in red print, the pieces have headlines thus: McClelland gave references for Sheik 'spy'. and Wife of Labor MP Bernie Ripoll buys mine boom land. McClelland's alleged bad deed dates back to 1995/96 when he was a backbencher, but the other piece re Mrs. Ripoll is an allegation tying up a tangled web that involves the defunct 'Utegate Affair' and the more recent and on-going China connection. Fasten your seatbelts LOL.

Ad astra reply

17/07/2009janice, BB, It’s clear from its handling of the Hu affair that the OO is intent on putting the boots into Rudd and anyone near to him. Both the ‘sheik’ case and the ‘Ripoli connection’ are gross beat-ups which will get no traction. They are too convoluted, one is old hat, and 99% of people will find them unutterably boring. Piers Akerman and Andrew Bolt may try to make something of them, but who listens to them? After the fake email scandal there will be a high level of scepticism among the general public about these new ‘exclusive’ stories. I was interested to read in today's [i]Australian[/i] in a piece [i]Clock ticking for weakened leader[/i],25197,25792429-17301,00.html by Dennis Shanahan, who among many other things, has this to say about the Hu affair: [quote]"While trying to deal with this dilemma and address his leadership weakness, Turnbull has followed the line of deputy Liberal leader and foreign affairs spokeswoman Julie Bishop, and her backbench namesake Brownyn Bishop, in urging Rudd to call his counterpart in China and demand action over the detention of Rio executive Stern Hu. This action is short-sighted, not very smart politically and potentially dangerous. The more constructive and smarter political ploy for Turnbull would have been to immediately offer bipartisan support for anything to help Hu, a position adopted on previous difficult diplomatic cases. That would have made Turnbull appear statesmanlike and responsible and leave open the option of taking the government to task if it proved incompetent. The public demands for action will keep the government under pressure without involving the Coalition, Turnbull would be exercising leadership and he would not be committed irrevocably to a course of action."[/quote] So Shanahan has taken a different line from Milne and Hewett, and aligns himself with Kelly about the stupidity of Turnbull taking the opportunistic line he’s chosen of demanding Rudd ring Hu Jintao at once demanding Stern Hu’s immediate release. In fact as I type this, I really wonder how Turnbull could be so injudicious, so irresponsible – yet we’re learning that this is the real Turnbull, the man who would be PM.

Just Me

17/07/2009[i]the man who [is now almost 100% certain to never] be PM.[/i] Alan Kohler on ABC Midday news said that foreign executives in China are "terrified" about what is happening in the Hu case, and the uncertainty is raises about how corruption and 'state secrets' are defined in China, and some major businesses are pulling out their non-Chinese staff from China. China is playing a dangerous game with this approach, which is neither sustainable nor to their longer term benefit. I predict they will more-or-less come around to seeing common sense and common ground on this issue, albeit after some face saving bluster and hand waving.

Ad astra reply

17/07/2009Just Me, I agree. China has as least as much to lose from poor handling of this matter, if not more than Australia does. They not only rely heavily on Australia's mineral resources, but also on foreign investment in China. Official Chinese rhetoric following Rudd's statement is just what would be expected, as Kim Beasley expressed today on the ABC's [i]The World Today[/i]. Why our media is so exercised about the dangers to Australia's position is a sign of the media's ineptitude, about which I am about to post another piece - [i]Let's leave it to Kevin.[/i]

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