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TheStreet Open House

China's Money Changes The Landscape In Australia

China's rapid rise has given Australia its strongest terms of trade since a global wool boom in the 1950s, says economist Peter Robertson at the University of Western Australia. "That boom was fairly short-lived," he wrote in an email response to questions. "This one's length is unknown. It may turn out much bigger depending on China's future growth."

The former British colony's relationship with China is deepening in other ways too:

â¿¿ More than 29,000 Chinese became permanent residents in the year ending June 30, 2011, for the first time eclipsing the United Kingdom, the traditional source of migrants. While India topped China in the next 12-month period, that appears to have been a blip.

â¿¿ China accounted for nearly two-thirds of the 10,407 business visas in the most recent year â¿¿ investors and entrepreneurs either given residency or put on a likely path to it.

"Here we have China not only being out biggest trading partner, it is now the major source of migrants and the major source of international students studying here," says Peter Drysdale, an emeritus professor of economics at Australian National University.

"The study leads to migration leads to investment, leads to the deepening of the economic relationship and the interaction between the communities," he adds. "The scale of it is ... now starting to cover a space that historically the relationship with the United Kingdom covered."

In eastern Australia, the China boom is reawakening the sleepy town of Gunnedah. Construction workers and surveyors in high-visibility, fluorescent green shirts are a common sight, a constant reminder that the plans to mine are the cause of the economic resurgence.

Not everyone is happy. The prospect of mining has divided the town of 12,000, including members of the extended Clift clan. There are fears that coal dust, endless coal trains and damage to the aquifers could forever alter a pastoral way of life, perhaps even make it untenable.

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