Australian Prime Minister Kevin Rudd has warned China that trade relations between the two countries - worth about 40 billion euros annually - could be jeopardised by the Rio Tinto affair. The Chinese authorities detained a senior Australian Rio Tinto executive, Stern Hu, on spying charges 10 days ago.

Mr Hu and three other members of the Anglo-Australian mining conglomerate had been conducting negotiations in Shanghai when they were arrested and accused of stealing state secrets from Chinese steel mills. The Chinese authorities allege that the information could be used in the negotiations on the annual price of iron ore. Australia's iron ore trade with China is worth almost 10 billion euros annually.

There is increasing public pressure on Prime Minister Rudd to take a tougher line against China. Beijing says  the Rio Tinto affair will not negatively affect relations with Australia.