Correction to This Article
The article incorrectly said that an Australian mining company had announced a $60 billion deal to ship 30 tons of coal a year to China. The multiyear deal was for 30 million tons of coal a year.

Australia welcomes China's investment, if not its influence

Australia's Mount Whaleback, now the world's biggest open-pit ore mine, is among the swaths of the country transformed by increased trade with China.
Washington Post Staff Writer
Sunday, February 14, 2010

NEWMAN, AUSTRALIA -- Here in this land of searing heat, scrub and eucalyptus, a land so vast that road signs warn the next gas station is 600 miles away, Mount Whaleback was once 1,500 feet high. Today it's a hole, the biggest open-pit iron ore mine in the world -- an entire mountain crushed, sold and shipped to China.

Trucks with tires twice the height of a grown man cart thousands of tons of raw ore to a processing plant, where it is separated and poured into the longest and heaviest train in the world -- 336 freight cars pulled by six locomotives. It chugs 300 miles to Port Hedland, where it is loaded onto ships bound for the unquenchable steel mills of the People's Republic.

Ton by ton, including more than 300 million tons of ore per year and vast quantities of liquid natural gas, China is buying Australia. One of the world's most staggeringly huge transfers of natural resources has both enriched and alarmed Australia, prompted a determined response from Washington and illustrated both China's savvy and ungainliness as it aggressively expands its influence around the world.

A surging China has become Australia's No. 1 trading partner. It has pumped $40 billion worth of investments into the Australian economy in the past 18 months alone. China's 70,000 students help bankroll Australia's education system, and a half-million Chinese tourists a year keep Aussies employed as lifeguards, blackjack dealers and real estate brokers. Chinese trade and investment have insulated Australia from the global financial crisis more than any other developed nation. Australia is even speaking Chinese: Prime Minister Kevin Rudd is the first Western leader to speak fluent Mandarin.

"China is remaking the social and political fabric of this country," said Chen Jie, a senior lecturer in international relations at the University of Western Australia who immigrated to Australia from China 20 years ago. "China is intruding into society itself."

But all those ties haven't bought China much love Down Under. Opinion polls over the past five years show Australians are increasingly wary of the behemoth to their north. Rudd, while embracing Chinese trade, has moved to balance relations with Beijing by bolstering military and diplomatic ties with Australia's longtime superpower ally, the United States.

In April, Rudd's government announced Australia's biggest military build-up since World War II and a report by the Ministry of Defense made it clear that China was the reason.

"As our trade ties with China grew closer, we believed it was necessary to hedge quietly," said Andrew Shearer, who served as national security adviser under Rudd's predecessor, John Howard. He said China's rise was a key factor in the decision -- initiated under Howard but continued under Rudd -- to pull even closer to the United States. Added Shearer: "We're seeing that thinking now across Asia."

Australian ambivalence has largely befuddled the Chinese.

"When Mr. Rudd was elected, there was an expectation that a more intimate relationship between the countries would result, because he knows China so well and speaks Chinese," Zhu Feng, a Chinese analyst, told the Australian newspaper. "But it has remained just at the commercial level."

Fast growth in Perth

No city better illustrates the China boom than Perth, the capital of Western Australia, a state five times as big as Texas that holds the bulk of Australia's mineral wealth. The state's average income has jumped $10,000 in five years to more than $70,000, thanks to China's purchases of iron ore, natural gas and other resources. In Perth, the median price for a home just broke $500,000. Its unemployment rate is a measly 2.6 percent; the national rate is just 5.5 percent and predicted to drop this year -- thanks mostly to China.

Beyond the numbers, Perth looks Chinese, with a skyline filled with skyscrapers and cranes. The city is bristling with more than $1 billion in new construction, including a hospital, museum, highways, offices and a vast indoor entertainment and sports complex. More than 110 people move into Western Australia each day, making it the fastest growing state in Australia, and there's still a labor shortage. Truck drivers working in the mines are paid $100,000 a year. A gate attendant at a mine makes $80,000.

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