IT’S Stern Hu Mark II. Another Australian entrepreneur has been jailed without charge in China. The alleged crime, according to John Garnaut, the Herald’s correspondent in Beijing, is “misappropriation of company assets”.

Garnaut’s sources say the arrest is a “business tactic”. The entrepreneur Matthew Ng was selling his travel business to the Swiss company Kuoni, they say, spurning a bunch of rival operators in Guangzhou who wanted to pick up the business on the cheap.

In China, there is no divide between business and politics; they are one and the same. There are not Three Estates, only One. There is no Westminster legal system, no presumption of innocence, only power. And right now, politicians of both flavours in Canberra will be wringing their hands, praying for another big news story to break.

We can’t be anti-China, that’s bad for business. And we can’t look feeble as our citizens are peremptorily hauled off to prison with no charge and with no transparent process; indeed no process at all. That’s bad for votes.

Denouncing human rights abuses in China is not de rigueur, especially when the Australian economy is a proxy for China and our prosperity hangs, to a large extent, on the economic growth of the Middle Kingdom. Exports to China have risen from just over $10 billion to almost $50 billion in only five years. This is one big client.

A few points about the Ng case. One, his arrest appears to have been a provincial matter. Not every deal is cut in Beijing these days. The incidence of local coercion and corruption, and the nature of the political process, varies from province to province.

Two, Ng’s innocence, or otherwise, may never be known. Although Chinese authorities demand that foreigners respect the integrity of their legal system, this is a system with neither transparency nor credibility.

Three, doing business in the Chinese market is an entirely different proposition to selling raw materials into the Chinese market. The evidence of riches from China is all about – the bulk of it struck by the likes of Rio, BHP and Fortescue, the exporters. Doing business in China – and getting your money out (as Ng was presumably doing by selling to the Swiss) is a far cry from selling raw materials and banking a cheque.

Once again, the regime made noises two months ago about liberalising the market for

foreign companies, relaxing the red tape. Many operators there say the restrictions, in practical terms, are getting tighter.

And if arrests and detention continue, it will only bolster the protectionist case here in Australia against Chinese investment, and arguably rightly so. Why should China be allowed to acquire Australian mines and land when the same rules are not accorded foreigners in China?

Frankly – given China is a military dictatorship packed with 1.34 billion people – it is remarkable that more abuses don’t arise.

Meanwhile, in Australia, while government shrinks from its duty to protect its citizens abroad – such was the fiasco which passed for justice in the Hu case – citizens will continue to express their anger in the media.

Expect more tabloid outrage about selling the farm and provocative language about “looming global food shortages”, even though the “land grab” by China is relatively tiny. Expect more opposition to Foreign Investment Review Board approvals on mining projects and takeovers.

Presently, less than 1 per cent of FIRB applications for foreign investment are rejected.

“Better late than never”, we submit, is the new creed of the corporate regulator, a realistic principle to which to aspire.

At the top of the market in late 2007 two funds managers were chatting about some of the more colourful float presentations they had seen. Being the top of the market, there were many colourful proposals. One funds manager confided to the other that when Storm Financial’s two principals, Manny and Julie Cassimatis, came to his office to present their $500 million float, he was taken aback because they had an argument, mid-presentation.

The other funds manager joked about the mooted Storm float and how it would “blow up” a lot of people. He was not wrong.

The next year was to be Storm’s last, even though Manny and a gaggle of true believers continue to blame the banks for shutting them down.

Some, sadly and as if they were the final disciples of a doomsday cult, still cling to the belief that that $4 million share portfolio they held – on a loan to valuation ratio of 80 per cent at the peak of the market – somehow belonged to them in perpetuity.

Although it was once sanctioned by the Financial Planners Association and the Australian Securities and Investments Commission, and although once fuelled by borrowings from banks that knew better but did nothing to stop it, the Storm financial model was always preposterous.

No one ought to be advised to put up their family home as collateral for a sharemarket play, particularly retail punters who know little about the sharemarket and are leveraged to 85 per cent.

Thanks to pressure from the plaintiff lawyers Slater & Gordon and their deal with the Commonwealth Bank, many “Stormers” are still in their homes. Finally, ASIC has stepped in to force a settlement from the recalcitrant lenders Bank of Queensland and Macquarie. That’s on a “no transaction” basis. That is, you don’t get your $4 million share portfolio back but you have a chance of starting from scratch.