Former Rio Tinto executive Stern Hu and his co-accused obviously did things in China that were wrong. But they also became embroiled in the current power struggle for control of China – a struggle that has now seen China’s two richest men thrown in jail and that will have long term implications for Australia.

Yesterday, Stephen Bartholomeusz set out the implications for Rio Tinto and Australia from the Stern Hu trial and conviction.

Today, I will look at what is happening at the top of the China leadership and how Stern Hu and his people were caught up in the politics.

To understand some of the forces that are now coming to the surface, we have to go back to the chaos which followed the death of Mao Zedong in 1976. In this explanation I am indebted to the research of the Stratfor Group.

After Mao died, Deng Xiaoping rose to the top and started the revolution that has transformed China. According to Stratfor, to avoid a repeat of the post-Mao transition uncertainty, Deng created a long-term succession plan and chose Shanghai Mayor, Jiang Zemin, as the person to replace him as President. Then, in an effort to preserve his vision and legacy, Deng also chose Jiang’s successor, current President Hu Jintao.

Hu was, therefore, more or less guaranteed the presidency a decade before he took office, and Jiang could not put his own stamp on who succeeded him. However, Jiang made sure that he left his mark by lining up Hu’s successor, Xi Jinping. In 2012, Vice President Xi Jinping is expected to takeover from Hu Jintao.

There is clear tension between the Hu Jintao support group and the Jiang Zemin group, which presumably includes Xi Jinping. Much of this involves Hu’s plan to develop a wider consumer base in China extending into the west. Jiang Zemin appears to favour concentrating on the eastern states, in line with the current model. But leaving aside policy differences there is a power struggle simmering close to the surface.

According to Fairfax media China correspondent John Garnaut, at the time Stern Hu was arrested President Hu used his control of the Communist Party’s internal commission to arrest China’s richest man, electronics magnate Huang Guangyu and others who were strong supporters of Jiang Zemin.

On the other side, Jiang Zemin’s supporters control another arm of the Chinese legal system and it is that arm that undertook the investigation of Stern Hu and the Rio Tinto executives. And one of the allegations they came up with should raise a few eyebrows. China’s second richest man Du Shuanghua is alleged to have bribed one of Stern Hu’s co accused. And if you trace the connections of Du Shuanghua’s family they have clear links to Hu Jintao.

In China, they play the political game using tough rules. As Stern Hu and the Rio Tinto co-accused found out, it is very dangerous to be caught close to one side even if that side is close to the President.

And it’s doubly dangerous if you are taking bribes that siphon money to yourself.