The ante has been upped. In both tone and language, yesterday’s missive from China’s National Administration for the Protection of State Secrets raises the stakes considerably in the screw-tightening on mining company Rio Tinto and its imprisoned executive Stern Hu.

“The large amount of intelligence and data from our country’s steel sector found on Rio Tinto’s computers and the massive damage to our national economic security and interests are plainly obvious” …

Stern Hu has been in “collusion with the senior ranks of some major steel enterprises” …

” … these are not merely individual cases, but the tip of the iceberg. If they are not swiftly investigated and dealt with, this will be disastrous.” …

“Many economic spies have acquired advanced technology, information about important negotiations and a range of other state economic, technological and commercial secrets, inflicting major economic damage on China.”

The Australian government has been right, so far, in its cautious handling of the Rio-Hu conflagration. But diplomacy isn’t only about being diplomatic. Sometimes pressing situations require more determined action.

In its recent Defence White Paper the Rudd government argued that China posed a mid to long term challenge to Australia’s regional strategic interests. The threat posed by China’s military might is one thing, the threat to Australia’s economic interest represented by the Hu case and its increasing pressure on Australia’s transactions with the region’s leading economy are quite another … a threat that is altogether more present, and increasingly clear.

Congratulations, while we’re all here, to Crikey’s Guy Rundle, shortlisted for this year’s Age Book of the Year award for his inspired chronical of last year’s US presidential race, Down to the Crossroads. Also shortlisted in the non-fiction section were: The Red Highway by Nicholas Rothwell, The Tall Man by Chloe Hooper, Gough Whitlam: A Moment In History by Jenny Hocking and Darwin’s Armada: How Four Voyagers to Australasia Won the Battle for Evolution and Changed the World by Iain McCalman.

The winner will be announced at the opening night of the Melbourne Writers Festival on August 21.