Mining Weekly reports that four executives from the Rio Tinto diamond mining company have been detained by China for spying, and warns that while the Chinese economy is booming, doing business with a single-party state can definitely be risky. For all China’s booming economy and glitzy jewelry boutiques, the online newspaper cautions that it is important to keep in mind that China is still run by a Communist party.

According to Mining Weekly, Chinese authorities detained Stern Hu, Rio's top iron-ore salesman in China, on suspicion of stealing state secrets. Australia Foreign Minister Stephen Smith stated that three Chinese nationals on Hu's team were also detained.

According to a statement by China's Foreign Ministry, the four “compromised China's national interest and security."

A Shanghai paper reported that Chinese steel mills had capitulated on the issue of annual iron ore prices, agreeing to the same 33% cut that other Asian steelmakers had set. This could be construed as a loss of face for the state-backed Chinese Iron and Steel Association, which had promised the central government to achieve a larger discount.

It pays to keep in mind that almost anything can be termed a state secret in China, especially when it comes to economic data.

The detentions occur at a time of increased tension between China and Australia. Last month Rio Tinto reportedly dropped a planned $19,5-billion investment by state-owned Chinese metals firm Chinalco, increasing strains between the trading partners just as iron ore term price negotiations were nearing their deadline.