China claims it has evidence Rio staff stole state secrets

China has told the Australian government it has "sufficient evidence" that detained Rio Tinto executives stole state secrets, a senior Chinese official said yesterday.

Vice foreign minister He Yafei said he briefed his Australian counterpart Stephen Smith of the developments on the sidelines of the Non-Aligned summit in Egypt last week.

"I stressed that we have sufficient evidence showing that the individuals involved obtained China's state secrets using illegal means," he told reporters. "The case has entered into the judicial process and I requested the Australian side to respect China's judicial sovereignty."

Chinese authorities arrested Stern Hu, the Australian head of the miner's Shanghai office, and three local staff earlier this month accusing them of bribery and other illegal means to gather state secrets.

However, Rio Tinto said in a statement last week that media reports its employees had bribed steel mill officials during tough iron ore contract negotiations were "wholly without foundation."

Australian Prime Minister Kevin Rudd has warned China that it had "significant" business interests on the line in Hu's case and that foreign governments and international companies were watching developments closely.

He is so far the highest-level Chinese official to comment on the Rio Tinto case.

His remarks came after Smith told Australian media over the weekend that China was handling the investigation as a criminal case with a focus on commercial and economic matters rather than espionage.