By RACHEL PANNETT

CANBERRA—Australia’s Prime Minister Kevin Rudd warned China “the world will be watching” how it conducts the trial of four Rio Tinto Ltd. executives, in a case that has sent chills through foreign businesses.

The trial, which opens Monday in Shanghai, comes as foreign firms are saying their relationships with China are suffering because of Beijing’s tough policies and its efforts to support domestic enterprises.

The executives at the Anglo-Australian miner have been charged with stealing commercial secrets and taking bribes. Rio Tinto has denied any wrongdoing by the company or its staff. The case has aroused great attention in Australia, as it has cast a shadow over growing trade links with China, and because one of the accused, Stern Hu, is an Australian citizen.

Mr. Rudd has called throughout the executives’ eight months in detention for the case to be dealt with quickly and transparently. His stronger words Thursday echoed a similar statement he made after the arrests of the executives in July. At that time, Rio Tinto was engaged in tough iron-ore pricing talks with China and had just rejected a Chinese bid to buy a $19.5 billion stake in the miner. The arrests appeared to many foreign businesses working in China as a threat about the dangers of crossing Beijing in a commercial dispute.

Yet Australian officials, after initially sounding alarms over the case, have since been measured in their comments, and the relationship with China has appeared healthy.

In October, Foreign Minister Stephen Smith said relations with China were back to “business as usual.” The countries held high-level defense talks that month and China has signed several natural-resources deals.

A harsh verdict in the Rio Tinto case, however, could upset the relationship. Australia’s leverage over China comes primarily in its ability to refuse Chinese investments in strategic mineral deposits. Chinese companies have launched a series of bids to lock up ownership of Australian mines in recent years, and while Australia has approved many of the deals, it has at times imposed tough restrictions or limited China to minority stakes. Analysts say Australia could take a harder line with China on such deals in the future—though doing so could prove unpopular with the country’s influential mining sector.

The minerals salesmen were detained in July and formally indicted in February on allegations of soliciting and accepting bribes from several Chinese steel enterprises. The indictment alleges the four used “improper” means to obtain Chinese commercial secrets from steelmakers.

The aspects of the trial that deal with commercial secrets will be closed to the public and to consular representatives. Mr. Smith, the foreign minister, reiterated Thursday that Australia has requested its officials be present for the entire trial, not just the bribery proceedings.

He said that under a consular accord between Australia and China, Australian officials should be allowed to attend all of the trial, but he added that even in Australia there are cases where trials are conducted in private.

Asked if Australia believes Mr. Hu will receive a fair trial, Mr. Smith noted that Mr. Hu will still be represented by his legal counsel.

Beijing on Thursday said the case is a commercial one that shouldn’t be politicized. A Ministry of Foreign Affairs spokesman defended the decision to close part of the trial, saying “noise” shouldn’t be allowed to interfere with the judicial process. “The Sino-Australian consular agreement also needs to respect China’s sovereignty and judicial sovereignty,” he said.

—Terence Poon
and Patrick Barta
contributed to this article.