Q+A-Why is China detaining Rio's mining executives?

(Reuters) - Australia's prime minister Kevin Rudd has raised the stakes over China's detention of an Australian mining executive on suspicion of spying, warning China on Wednesday that the world is watching how it handles the case.

Here are some questions and answers about the latest developments:

WHO IS BEING HELD?

Stern Hu, Rio Tinto's head of iron ore marketing in China, and three other members of the Shanghai-based iron ore team were detained in early July for "stealing state secrets."

Hu, a Chinese-born Australian citizen, was accused of obtaining and passing on the Chinese industry's negotiating position, sources said.

Rio's China team carry out some negotiations and manage operational details of term contracts for iron ore, a key ingredient in steel making, as well as tracking market information.

An iron ore executive from China's eighth-largest mill, Shougang, is also in custody, Chinese media reported. Executives from other big Chinese mills are also being questioned.

WHAT IS SIGNIFICANT ABOUT THE TIMING OF THE ARRESTS?

They came at a sensitive time, as Chinese steel mills had reportedly given in after protracted annual iron ore price negotiations, while their official representative, the China Iron and Steel Association, held out for deeper cuts than those obtained by Japanese and Korean steelmakers.