Dealing with China has always been complex, as Rio Tinto knows.
IT'S dangerous in a weekly newspaper to jump too early on a breaking issue.
It's also risky to step into territory like diplomatic relationships, which are far from bread and butter of a Western Australian-focused journalist.
Nevertheless, I've found the news of a Rio Tinto executive's detention in China quite disturbing.
While it's too early to say what has really happened, the perception created by the apparent arrest on suspicion - initially of espionage and later of bribery - of Stern Hu, the chief iron ore negotiator for Rio Tinto, does underscore an issue I first raised in late 2007.
Back then, a plethora of deals involving investors from China and the former Soviet Union bothered me. That was not because I am xenophobic but because I have grave doubts, for various different reasons, about the motivation of those making the investment or, at the very least, their lack of subscription to true principles of the free market.
In both cases, I felt that the laws and political situations governing the investors were markedly different from what we considered normal. The lack of transparency meant we were putting the integrity of our own systems at risk.
Since then, Chinese investment in particular has become an even hotter subject. The federal government, led by Kevin Rudd, who is seen to be leaning more towards China than his predecessor, was put in a tricky situation when Chinalco sought a major investment in Rio Tinto.
While it may be of some relief to Mr Rudd and Rio shareholders that that investment did not come to pass, the events of last week provide some evidence of what a dangerous business it is to play around in this field.
While Chinalco has said it has nothing to do with the arrest, and the Chinese government has warned the moves should not be linked to the failed deal, it would not be hard for the amateur foreign affairs watcher to conclude that this was a response to Rio's snub, followed by its move to form an iron ore joint venture with BHP Billiton and its continuing efforts to play hard ball on prices.
Apart from the obvious connection, there is also the added perception that what we call 'market knowledge' is considered a state secret in China.
This is where the reality of China Inc lies. It underscores the view that when you do business with a Chinese company, you are really doing business with the state, an undemocratic body that rules the fastest growing (and soon to be the most important) economy in the world.
And it is not as if the Chinese have sought to disguise that. In fact, from their heavy-handed actions last week, you'd think they were advertising it.
Of course, we ought to put this in context.
People go missing in China all the time without even their families knowing why: it is, after all, a communist dictatorship. The arrest of Mr Hu simply serves to remind us of this.
To be fair, Australia also acts as a state to protect its interests. Government agencies help Australian companies do business overseas in all manner of ways, from trade missions to subsidies.
And you can be arrested for industrial espionage in Australia too; it's called stealing. Of course, we like to think we are a little more open and transparent about how we go about such things. Governments have to be, thankfully, because we are a democracy.
We are also prepared to break our principals to take commercial advantage of customer nations. Few have batted an eyelid at the thought of Rio and BHP Billiton acting as joint venture to extract a commercial advantage for their iron ore. If they supplied the domestic market this would never be even considered. In my view, laws against joint selling arrangements and similar cartels ought to be strictly enforced no matter what excuses may be given.
Nevertheless, what we saw last week is merely a reminder that China is different and ought to be engaged in a different way.
That doesn't mean we should be snubbing them as investors, either. For our own future security it is in our interest to allow China to invest alongside Japan, US and European interests.
To block them risks creating both an enemy and an investor in rival provinces. This would be dangerous.
Somehow, we have to find a special way to allow them to invest in a way that is limited until their systems are more compatible with ours.
Waterfront warning
ON a far different note, my thoughts keep returning to the Perth waterfront and the most recent efforts by Premier Colin Barnett to put forward yet another proposal for the area.
Last week, it dawned on me that this might be an act of bravery, or folly, depending on how you view recent premiers' attempts to sanction development on the foreshore.
Of course the obvious example is that of Alan Carpenter, who unveiled his vision for the waterfront in February last year. Just seven months after 'Dubai on Swan' was launched, he was kicked out of office.
Go back to the late 1990s and take a look at two other foreshore developments - the much-maligned Bell Tower and the hugely disliked Perth Convention Exhibition Centre. Both were launched by then-premier Richard Court, whose reign did not last to see the latter completed. His successor, Labor's Geoff Gallop, barely survived a year in office after the convention centre was opened.
And there's another Swan River link to the demise of a state premier. That was Mr Court's predecessor, Carmen Lawrence, who allowed the redevelopment by Multiplex of the Old Swan Brewery site.
At the time, indigenous groups warned about impacting on a site of significance for their culture's serpent-like wagyl, which they believed made the Swan River.
Perhaps there was something in this after all.
