Cover Story September 2, 2010, 5:00PM EST

The Deal Is Simple. Australia Gets Money, China Gets Australia

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But if it's just a customer, what are its obligations to the supplier? Tony Wiltshire asks a question that is a perennial for citizens of a land that is used as a quarry: "Are they just here to make a buck and go, or build something sustainable? The question is whether we're going to have mines with towns, or towns with mines."

That question speaks to the rest of Australia. In June, Wiltshire was one of many locals surprised to see the Sino mine project in the Pilbara advertise for riggers, crane operators, and fitters who speak Mandarin. As an unhappy union official named Joe McDonald put it: "The only bloke I know who can speak Mandarin is Kevin Rudd."

John Sutton, the national secretary of the Construction, Forestry, Mining and Energy Union (CFMEU), the biggest representative of Australian mine workers, voices a widely held concern: "As more Chinese investment comes in, it's inevitable that they'll want to bring in their own workforce, with lower costs and conditions than the locals. Why else would a company advertise in a way that shuts out pretty much every Australian job applicant?"

Or, as Kinnaird puts it: "We've seen it before in the 1980s, when Japanese companies brought in Japanese-speaking workers. When the Japanese economy busted and they pulled out of Australia, they left nothing for the local workforce."

It is all a jarring turnaround in a long relationship. For most of the 20th century, Australia had an immigration policy that was biased against non-Europeans. Although Australia recognised the People's Republic of China in 1972, ahead of many Western governments, trade with communist China was minimal until this decade. A precedent existed, however, in Japan, which went from Australia's No. 1 military threat to its biggest trading partner in the space of a generation.

With such an unexpected and rapid windfall, from a country with a suspect record on human rights and unknown intentions for its trading partners, it is perhaps normal for many Australians to look for a catch. Fergus Hanson's polling shows a recent pushback against China. "Record numbers of Australians support our alliance with the USA," he writes. "Part of that is the popularity of Barack Obama, but a bigger part is fear of China." These findings were backed up by a survey of 2,000 investors in January 2010 by Fairfax Media newspapers, in which only one in five had positive feelings about Chinese investment. Others were worried by China's human rights record, or that China's state-owned enterprises would act against Australia's interests.

At street level, there is little evidence of ethnic tension. Chinese businesses are long-established not only in Australian cities but in small rural towns. "Chinese immigrants were here very soon after the Europeans," says Kinnaird, "They've long been a part of Australian life."

There has been no recent reporting of race-related violence against Chinese in Australia, as compared with the well-publicized attacks on Indian students in 2009, the riots directed at Middle-Eastern immigrants in 2005, and national anxiety over asylum seekers from South Asia. Says Kinnaird, "The tension you do see is related to labor markets specifically, through workers coming in from China on short-term visas, rather than a broader social phenomenon directed at Chinese-Australians."

For union leader Sutton, it boils down to what the Chinese companies build and leave here. "The big mining companies have tended to see themselves as visitors to an area, flying in and flying out," he says. "What's needed is for governments to insist on them contributing to the building of schools, roads, hospitals, permanent housing, all the things that are going to leave these towns better than before. As long as the companies aren't doing that, the fear for Australia workers is that Chinese companies will just be building camps to fly in and fly out Chinese workers on temporary visas, to work for less pay and worse conditions, and deprive Australians of the benefits that they are due."

One of the local councils in the Pilbara, Shire of Ashburton, recently refused permission to Rio Tinto to expand its camp around the Tom Price mine. Instead the company has been asked to invest in facilities that will remain after the mine is closed, to spend $247 million on housing, an air strip, and other infrastructure at the town of Pannawonica. This kind of investment, and the employing of locals, is the only move that is going to convince skeptics like Tony Wiltshire.

"We were at a town meeting the other day when a representative from a mining company said, 'Come on, we're all up here to make a dollar.' The locals in the room looked at each other and thought, 'What?' We live here. We can cope with the hot summers. We're here for the long term. We are actually better for the multinationals than the contractors they fly in and fly out. We just need them to wake up to the fact that they, and we, are all in it for the long haul."

Like many miners making money off the boom, though, Michael Box is optimistic.

"I'm a simple man, but I've had a good life," he says. "My total salary and superannuation is A$145,000 a year, and when I'm in the Pilbara I don't have to put my hand in my pocket. I have a house in the city and an investment property and a 1972 Falcon pickup. I couldn't have had this life without mining."

And though he has seen booms go bust, his confidence stretches as far over the horizon as Australia's economy seems to. "When my 18-year-old son Christopher was wondering what to do with his life, I showed him everything I've got from driving trucks and carrying dirt," says Box. "He's decided to study mining engineering. I'll be proud as punch if he ends up being one of my bosses."