China could wrap up its investigation of four Rio Tinto employees suspected of industrial espionage and bribery, including an Australian national, in two months, one of their lawyers said yesterday.

China said last week it had formally arrested four Shanghai-based Rio staff, including Australian passport-holder Stern Hu, over accusations of bribery and stealing commercial secrets.

Mr Hu and his Chinese colleagues Liu Caikui, Ge Minqiang and Wang Yong were originally detained on July 5 amid difficult negotiations between Rio and Chinese mills on iron ore prices.

Their detention had put some strain on relations between resource-rich Australia and China, the world's biggest iron ore consumer.

"Under Chinese criminal law, the investigation could last two months, but the police may wrap it up earlier than that," Shanghai-based lawyer Zhai Jian, who represents Ge, said when asked when prosecutors would move forward.

Charges against the four Rio staff have been downgraded from more serious allegations involving "state secrets" to suspicion of obtaining commercial secrets through "improper means" and bribery. Dr Zhai, who visited his client for the first time on Tuesday, said Mr Ge looked "all well". His colleague Zhang Peihong, who will represent Mr Wang, saw his client the same day.

Zhang, as well as the lawyers reportedly representing Mr Hu and Mr Liu, were not immediately available for comment.