China has launched an investigation into suspected industrial espionage in the steel sector.

Senior staff of at least five Chinese steel and iron companies have been questioned by the authorities. They are thought to have passed information on to the multinational Rio Tinto.

An Australian Rio Tinto employee has been in custody in China for some time. The Australian government has complained to China about the affair which is now threatening trade relations between the two countries. Chinese-Australian trade was worth about 40 billion euros in 2008.

photo: Chinese steel factory (flickr.com/Erik Charlton)