Chinese influence worries Australia

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, 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 number one 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 -the national unemployment rate is just 5.5 percent. 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 emigrated from China 20 years ago. “China is intruding into society itself.’’

But 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.

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 an Australian newspaper. “But it has remained just at the commercial level.’’

For their part, Chinese investors are bullish on Australia and say they are learning to work the system.

Lai Cunliang is the Chairman Mao-quoting chief of operations for a Chinese coal company that acquired an Australian competitor for $3 billion. “We’ve got capital, we’ve got talent, and now,’’ he said, “we’re coming out. We are driving change.’’

A steel company from China’s Hunan province sank $580 million into Fortescue Metals Group last year, turning the company’s chairman, Andrew “Twiggy’’ Forrest, into Australia’s richest man. Chinese firms also snapped up a uranium mine, gold and coal mines, offshore natural gas fields, real estate, and wineries. An Australian mining company recently announced a $60 billion deal to ship 30 tons of coal a year from a proposed mine in Queensland.

“The numbers are so big it’s deceptive,’’ said Sam Walsh, who runs iron ore operations for Rio Tinto, the Anglo-Australian mining giant in which a Chinese firm, Chinalco, tried unsuccessfully to buy an 18 percent stake last year. “No one has seen this before. It is manna from heaven.’’