China's state-secret watchdog has accused mining multinational Rio Tinto of engaging in commercial spying over six years, saying data on the company's computers showed the espionage came at a "huge loss to China."

Rio has said its employees did nothing "unethical" and did not bribe Chinese steel mills for information.

A report issued by China's National Administration for the Protection of State Secrets said Rio Tinto's commercial spying involved "winning over and buying off, prying out intelligence, routing one by one, and gaining things by deceit" over six years.

"The large amount of intelligence and data from our country's steel sector found on Rio Tinto's computers and the massive damage to our national economic security and interests are plainly obvious," said the Chinese-language report issued on the Website (www.baomi.org) of the administration on Saturday.

China has detained four Rio workers - Australian Stern Hu and three Chinese colleagues - on allegations of stealing state secrets about iron ore price negotiations.

The new Chinese report said Rio's spying meant Chinese steel makers paid more than 700 billion yuan (US$102.46 billion) more for imported iron ore than they otherwise would have.

A Rio spokeswoman in Australia said yesterday she was unaware of the Chinese report and declined to comment further.

The report said the case should force Chinese officials and companies to do more to protect sensitive commercial information, and foreign businesses in China must come under stricter controls to deter them from spying.

"Our country has entered a peak period of commercial espionage warfare, and the threat to important economic intelligence and security of national economic activity increases by the day," the report said.

Stricter controls

The report and others on the administration's Website said the government should spell out more clearly what commercial data was regarded as official secrets.

Contacts between local officials, experts and managers and foreign businesses should be more strictly controlled, said the report on Rio, adding that "traitors" were enriching themselves at the expense of Chinese businesses.

"The Rio Tinto spying case has again sounded the alarm over secrets protection by our country's state-owned enterprises and corporations," wrote Luo Jianghuai, a secrets-protection official in eastern China's Jiangsu Province, in an essay accompanying the report on Rio.

Luo said multinationals used Chinese staff with experience in local businesses and government to illicitly gain data and influence.

(Shanghai Daily August 10. 2009)