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The Australian government has said it will handle allegations that an Australian national stole state secrets in China with caution.Prime Minister Kevin Rudd said the arrest of Stern Hu, an Australian working for the Rio Tinto mining group, required sensitivity.

Foreign Minister Stephen Smith said a consular visit to Mr Hu in Shanghai was planned for later on Friday.

The arrest has sparked fears of trade friction between Australia and China.

"The business of dealing with difficult, complex diplomatic questions, particularly when human lives are concerned, requires sensitivity and proper handling," Mr Rudd told state radio ABC from Italy, where he was attending the G8 summit.

"With all complex consular cases, we have to proceed cautiously," Mr Rudd added.

"Our challenge in the immediate period ahead is to establish all the facts," he said. "We're going through that with the Chinese now and it will take some time."

Sensitive

Australian newspapers attacked Mr Rudd's perceived weakness towards China following Mr Hu's arrest.





The BBC's correspondent in Sydney, Nick Bryant, said Mr Rudd is often accused by opposition politicians of being soft on China.

They have called on Mr Rudd to use his knowledge of Mandarin to lobby Chinese president Hu Jintao.

But Mr Rudd has so far favoured a softer approach, our correspondent says.

China has given assurances however that Mr Hu is being treated well, Australia's foreign minister Mr Smith told reporters.

China's ambassador to Australia has also been called in for consultations.

Speculation that the arrest of Mr Hu may have something to do with the ongoing negotiations over the price at which iron ore should be exported, appeared to be confirmed by Chinese state media on Friday.

This alleged the Rio Tinto staff had bribed employees of Chinese steel companies to get secret information on China's position in iron ore price talks.


Mr Hu, Rio Tinto's top iron ore salesman in China, is among four Rio Tinto employees arrested for allegedly stealing state secrets, an offence that carries a maximum term of life imprisonment.