Four Rio Tinto executives, including Australian Stern Hu, face charges of stealing commercial secrets in a Shanghai court on Tuesday after admitting to bribes in iron ore negotiations with China.

Hu and three Chinese employees of giant miner Rio -- Liu Caikui, Ge Minqiang and Wang Yong -- face jail terms of up to 20 years on the bribery charges alone, according to a lawyer for one of the accused.

The trial is taking place at a time when foreign business sentiment is souring against China. Rio has said the four did nothing wrong.

Rio chief executive Tom Albanese told an audience in Beijing he did not want to jeopardize business ties with China, the world's biggest consumer of iron ore.

This issue is obviously of great concern to us, Albanese told a forum of officials and executives, referring to the case.

Canberra has protested China's exclusion of Australian diplomats from watching the court proceedings that deal with commercial secrets, saying they have the right to be present for the whole trial, scheduled to last until Wednesday.

Tao Wuping, a lawyer for the accused Liu, said the commercial secrets accusations would probably be heard on Tuesday.

This morning we'll be arguing all aspects of the charges, said Zhai Jian, the lawyer for Ge. Everyone will speak. There are eight lawyers, so I can't predict when this session will be finished.

The case has thrown a spotlight on China's often murky marketplace, where legal boundaries can be vague and courts closely tied to the state, creating pitfalls for businesses seeking profits in the world's third-biggest economy.

At the same time as the Rio trial, Google Inc said it was closing its China-based search service and redirecting users to an uncensored portal in Hong Kong, drawing harsh comments from Beijing.

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The four employees from Rio's iron ore team were detained last July at the height of fraught price negotiations over ore, a lucrative resource for Chinese steel makers, the world's biggest consumers of the stuff.

Shanghai is likely to want the case to end quickly, before its much ballyhooed 2010 World Expo opens in May.

Tom Connor, the Australian Consul General in Shanghai who attended the hearing, told reporters on Monday Hu was accused of taking bribes worth 1 million yuan ($146,500) and $790,000.

Lawyers for the three Chinese defendants said they also acknowledged taking bribes, but maintained the amount of the kickbacks alleged by prosecutors was inflated.

The lawyers did not explain what the bribes were for.

China has not provided details about who may have offered the bribes. Two executives from Chinese mills are being held in custody, but the government has not said what their role in the case might have been.

On Tuesday, Australian diplomats entered the court without making comments to foreign reporters, who are not allowed into the trial at all.

($1=6.825 Yuan)

(Additional reporting by Royston Chan)

China Australia