fmg the big winner - chinese leading bus magaz

CHINA's leading business magazine Caijing has suggested the stoush between Australia and China over iron ore could be resolved if Australia recognised the issue was not "purely commercial" -- and that China should shun conspiracy theories and not exaggerate threats.

The publication lauded Fortescue Metals Group as the "big winner" in this year's still unresolved iron ore talks.

Caijing is famed for its often fearless investigative reporting about China's business sector and is widely seen as one of the nation's most important media outlets, but until now it has stayed relatively silent on the detention of four Rio Tinto executives, including Australian Stern Hu, in early July.

Mr Hu was leading Rio's negotiating team on increasingly fraught iron ore price talks, and the men were arrested on charges of bribery and stealing business secrets -- a downgrade of more serious accusations of stealing state secrets.

This week Caijing ran a lengthy article on the issue as well as an editorial titled Digging Out of a Sino-Aussie Resource Trap by its editor-in-chief Hu Shuli, who was recently branded "the most dangerous woman in China".

Ms Hu said "riding on China's rise is both a backdrop and at the core of" the Rudd government's policy.

"Without good Chinese relations, Rudd's middle-power diplomacy is impossible," she wrote.

She described the "backsliding" of relations as a "resource trap".

"Nations in the 21st century still regard resources as a zero-sum game," Ms Hu wrote.

"And as soon as these are labelled 'strategic' resources, deep-seated suspicions rise to the surface, while mutual trust can be easily lost and difficult to regain."

To try to fix the situation Ms Hu offered a suggestion: "The Australian government ought to take seriously the international political-economic implications of the current iron ore debate and end its 'ostrich policy' -- that is, pretending this is a purely commercial issue."

She said "China must shun speculation about conspiracies".

"It must not exaggerate threats posed by a concentration of upstream resources and overlook the fact that iron ore prices respond mainly to supply and demand. Rising prices are a result of strong demand from Chinese steel mills.

"At the same time, China should follow internationally acceptable ways to handle commercial misconduct."

Ms Hu said the downgrading of official accusations against the Rio executives was "progress".