''I have never seen anything so insane in my life as what happened to us there,'' the veteran real estate agent recalls.

At 6pm, when he looked through the glass doors, he was stunned to see a surging crowd of prospective buyers - virtually all of whom had Chinese faces. ''I had to scream, 'Stop! Stop! You're going to break the glass windows down!'''

An Australian resident passport was needed for admission, and each of the 300 who filled the former bank was given a name tag and number, with a purchase limit of one unit each. ''I had 16 people to sign up the contracts and we couldn't sign the contracts fast enough,'' he says.

By the time he closed the doors at 3.15am, Castran had sold apartments worth a combined $40 million. Mini-auctions were held for some highly sought-after units, such as those with the number 8 - auspicious in Chinese culture. They went for up to $40,000 above the asking price.

''I've been at it for 30 years,'' says Castran. ''I've never seen that.'' Of the 116 units, only two were sold to Caucasians.

This boom in property acquisition by the Chinese, spurred by a surge in migration, comes as Prime Minister

Julia Gillard is preparing Australia for the Asian century. She has asked former Treasury secretary Ken Henry to work on a draft white paper that will canvass Asia's economic, political and strategic developments - and, crucially, look for opportunities that flow from the new Asian middle class.

But while Australia prepares to embrace Asia, in many ways the reverse has already happened in places such as Glen Waverley. What was once a white middle-class eastern suburb has transformed into a thriving, dynamic hub of Chinese Melbourne.

The recent census revealed that Glen Waverley, the urban heart of the City of Monash, has one of Melbourne's greatest concentrations of people with Chinese ancestry. There are almost 10,500 people in this group, or 22.4 per cent of residents. This compares with 3.7 per cent for Victoria overall and 3.1 per cent nationwide.

Glen Waverley is one of several suburbs that Chinese arrivals are calling home - think Box Hill, Clayton, Doncaster, Melbourne and Carlton, with its international student population.

On the 40th anniversary of diplomatic ties between Canberra and Beijing, Australia is still grappling with the implications of our relationship with China. It's easy to view this in the abstract - somebody else's mines, somebody else's missiles.

Then there is the story unfolding in suburbs such as Glen Waverley. The luring of international students by Australian universities in recent years has played its part, but there appears to be a more permanent trend emerging. The most recent analysis by the Bureau of Statistics shows that in 2010-11 the United Kingdom - accounting for 10 per cent of permanent additions - is no longer the largest source of migrants to Australia. China has taken that mantle, with 14 per cent of the migration program.

But why are so many choosing Glen Waverley? The answer is that it provides the crucial building blocks to begin a life in a new country: good public school education, transport, a safe environment and - an important factor - other new migrants.

There are changes, too, in where Chinese migrants are coming from. The first wave of arrivals from Hong Kong and Malaysia has been replaced by more migrants from mainland China. In the City of Monash, 8.1 per cent of residents were born in China, up from 3 per cent in 2006.

A year on from those frenetic scenes in the display suite, work on the Ikon development has now begun behind blue hoardings. Ikon sits at the top of Kingsway, which was once a vanilla shopping strip of Melbourne's comfortable white-bread east.

These days, the air sings with the rises and falls of Chinese dialects. The shop signs tell the story in English and Chinese characters. The Red Box karaoke lounge sits above a Sichuan and Shanghainese restaurant. The KMT Butcher is across the road.

Nearby lies the sprawling Clayton campus of Monash University. Next to Kingsway is Glen Waverley Secondary College, a shining light in Victoria's public education system. Last year, the school was the highest performing non-selective state school in the VCE.

Of its enrolment of about 2000, 80 per cent of students have Asian backgrounds. About half have Chinese ancestry. Principal Gerry Schiller sees a diverse and harmonious student body. ''A lot of them have come through primary school together and they take for granted cultural diversity, and everybody gets along with everybody else and it works beautifully,'' he says.

The school's academic success is due in part, perhaps, to the fact that it is under close scrutiny from parents who are focused on education.

''The Chinese community especially, they know what's happening. One of the things they are seeking is a school that has a very strong academic focus. The vast majority of our kids are headed for university,'' Schiller says.

But there is a downside to this intensity, with Schiller saying the strong family values around education can be a two-edged sword.

''It means that the kids are really strongly encouraged and supported, but it can mean they're required to study within an inch of their lives,'' he says. ''They are doing a lot of unnecessary tutoring.''

VCE student Anna Wong, 17, a school captain whose mother was born in Hong Kong and father in Malaysia,, says the school's diverse population means she has witnessed very little racism.

''It creates quite a unique atmosphere because, many of the students, they've obviously been influenced by their parents and their culture, and this definitely can be seen through their work ethic and their motivation and their discipline,'' she says.

Two years ago, Glen Waverley established a relationship with a school in Shanghai after some students took part in the Shanghai Expo. A group of Chinese students visited Glen Waverley last year. At the end of the visit, Schiller asked a student about the biggest difference between Glen Waverley and the Shanghai school.

''At Glen Waverley,'' the student replied, ''the students talk in class.'' At first, Schiller thought it was a reference to behaviour. Rather, it was about students having a voice in class, being able to express themselves.

''That sort of tension between what the parents' expectations are - which are really hard-driven learning around content - and what we're trying to do, which is obviously to get the kids to develop a whole range of skills. It's an interesting one that we've got to deal with,'' he says.

On Saturday mornings, the clash between Western and Chinese educational cultures evaporates. At campuses across Melbourne, students from the Xin Jin Shan Chinese Language and Culture School study Mandarin as an extracurricular activity. Xin Jin Shan means New Golden Land or Mountain. It was the name given to the Australian goldfields in the 1850s by Chinese immigrants, who called the declining Californian goldfields Old Gold Mountain. Fittingly, the name captures the aspiration of the families who enrol their children there.

Saturday language schools among migrant groups have been a long-standing tradition. What makes Xin Jin Shan stand out is the numbers. Six years ago, the school had 2000 students. Today, that figure is 4000, as enrolments have reflected the dramatic surge in Chinese immigration.

The school also has a booming after-school program in primary schools at 12 different sites.

Twenty years ago, academic Haoliang Sun arrived in Melbourne and lectured in the Asian department at Monash University. His son, 10 at the time, was fluent in Chinese. But after six months Sun noticed his son was starting to forget his native language. ''He still needed to continue his Chinese study,'' recalls Sun. ''I found lots of the children of Chinese immigrants still needed to learn Chinese.''

And so the weekend school was born, and Sun eventually left his job at Monash to run it. But he is thinking beyond Chinese-language schools. He wants to establish a bilingual Chinese-Australian school, in the vein of other international schools. It would be a local school that welcomed all students. It would also use the Australian curriculum. ''That's very important,'' he says.

The search is now on for backers. ''In China, in Shanghai, there are different schools - English schools, American schools, Japanese schools,'' says school official Jeanine Ma. ''Why doesn't it happen in Australia? Especially in Melbourne, with [such a big] Chinese population.''

There are important supporters, among them Jieh-Yung Lo, deputy mayor of Monash and a two-time councillor - the first Chinese Australian elected to the Monash council.

Lo is a smart, articulate ''ABC'', as he calls himself: an Australian-born Chinese. His parents migrated from Vietnam 35 years ago, but he has traced his Australian connections to the gold rush. His great-great grandfather arrived on the Victorian goldfields from Guangzhou in the 1850s. He made his fortune but was robbed back in China and returned to Victoria.

He also traces a long line of service to the community and nation in his family, including his grandfather fighting for China in the second Sino-Japanese war, and his father fighting for the south during the Vietnam War. It was this tradition of service that prompted him to run for council.

''The first thing I said when I got elected was, first and foremost I'm elected to represent the residents of Mount Waverley [his ward], but secondly I have the added duty of representing the Chinese community in civic affairs,'' Lo explains.

The question of political involvement by the Chinese community is intriguing. ''This is an area I think the Chinese community is very behind, in in terms of being involved in mainstream politics. Not so much in joining a political party per se, but being interested in current affairs,'' he says.

As Lo points out, the immediate focus is on everyday life: economic survival, settling in a new neighbourhood, paying bills.

He looks at the political awareness and involvement of other ethnic groups, such as the Greek, Italian and Jewish communities. ''The Chinese community still has a long way to go.''

The moment of true connection with the Australian body politic came in 2007 with the election of the Mandarin-speaking Kevin Rudd as prime minister. There was excitement in the Chinese community that its adopted country was on the verge of a deeper relationship with the motherland. Then, of course, it was all over, when Gillard toppled Rudd.

''That shook the Chinese community quite a bit,'' says Lo, an ALP member. ''They felt extremely disappointed in him departing as prime minister.''

It is hard to identify the Chinese community as a voting bloc. Lo argues it is one of the most electorally swinging communities. But they have influenced elections. In 2007, the Chinese vote in Bennelong was seen as critical in Maxine McKew's ousting of John Howard.

The complicated relationship between China and Australia also has a knock-on effect to the local Chinese community. Invariably, they are caught between allegiance to their adopted home and loyalty to the motherland.

The moments of tension can have an impact, such as the 2009 defence white paper that identified the China threat in all but name.

Lo wrote an opinion article that year in which he argued that the notion that China could be a threat made Australian Chinese feel threatened. If China was a threat, did that imply the 700,000 Australians of Chinese heritage were a threat to Australian society as well?

Lo says he has never understood why Australians fear China. ''China's never had a history of colonisation nor had a history aggressiveness,'' he says. ''We can argue about whether Tibet was aggressive or not. But in terms of direct colonisation and expanding beyond its historical borders, we've never experienced that with China.''

Lo has also explored the vexed issue of human rights, and the West's criticism of China. He says Asian values and traditions bump against the traditional Western view of human rights. Asian values are more focused on the collective rather than the individual.

In the meantime, a simpler story is unfolding in the suburbs of the City of Monash.

Chinese arrivals continue to grow. Among them are Robert Li and his family of four, who arrived from Zhejiang province 18 months ago.

The experience of immigrating, he explains, has been a mixture of excitement, frustration, happiness and anxiety. Language was a barrier at first, but they worked hard to learn English. The initial lack of a social network has also improved over time.

Coming to Australia, said Li, was all about a change in lifestyle. ''In our mind, the lifestyle in Australia is more relaxed, simpler and free. After 1½ years, I think that's true.''