But why the hang up over a minor difference and that China's GDP is only 7.5%pa instead of 7.8%pa or 8%pa?. As a Chinese presenter commented at the last Sydney RIU conference in May, most people know that China's GDP numbers are just a broad guideline average over China and have an error of up to ~10%, ie 7.5% can be 7% to 8%. We gave an indication of some of the high >14% GDP numbers of that range in our recent Goode News column on page 9 of the April 2013 issue of Paydirt.

However, what the market seems to have completely missed / overlooked / underestimated is that in addition China's growth, China is building the world.

China has recognised that in order to achieve its aims of where it wants to be in 20 or 50 years' time, it needs to have the rest of the world with it. Since Li Keqiang became Premier of China in March 2013, every country in the world appears to have fallen over itself trying to do joint venture deals with China welcoming it with open arms. Countries and their capital cities have been vying with each other to try and be recognised as major centres for trading the Yuan or Renminbi. Frankfurt is now leading the "pack" with a proposed currency swap of $130bn (Rmb800bn),  and which now easily pips London's Rmb100bn.

For the first time, there is a country that can do deals with anyone, any country including Iran, Iraq, Pakistan, PNG, Switzerland, Greece, the US - everywhere, even both sides of any potential conflict of interest such that both countries including China benefit in an $"x"bn or $"y"trn joint venture win-win situation.

In June 2013, even the Nicaraguan government gave approval for a Chinese company to build a rival Panama Canal for $40bn starting construction possibly in 2015.

On 18 July 2013, the China Daily reported that China had started a cargo rail service from Zhengzhou to Hamburg, taking 18 days to cover the 10,214km distance, it is twice as fast as maritime/shipping (Shanghai to Hamburg takes 36days via the Suez canal) and $489 cheaper than road (clearly costed in detail). This further rail link is a variation on the Chongqing to Duisburg (Germany) 11,179km link that takes 16days.

Its significance is because it is from Zhengzhou. Zhengzhou (in case you have not heard of it) is the provincial capital city of Henan Province and lies at the intersection of two bullet-train lines and two cross-country inter-province freeways. In mid May 2013, it was announced that China's first airport economic zone was being constructed at Zhengzhou over an area of 415sqkm, and when complete in 2025 was expected to have reached annual revenue of >$1trnpa. In 2012, Zhengzhou's GDP was up 12% to $92bn.

China is in fact creating new business zones/parks in its major cities like Chengdu etc, and an international trade and logistics park (effectively an "inland port") has started construction in Xi'an over a designated area of ~44.6sqkm, initially with a rail container centre station.

In early July (the 3rd), the State Council gave approval for Shanghai to be China's first free trade zone (FTZ - ie world class transportation and communication facilities in a tax-free environment) over a designated area of 28sqkm around the Yangshan Deep Water Port and it is expected to be completed by 2023. Shenzhen already has a small FTZ area and has applied for it to be increased, while Tianjin is proposing that its new Binhai/Dongjiang port development area should also have FTZ status.

The freight travelling times from China via Kazakhstan, Russia and Poland to Europe are expected to be further reduced by the new high speed railway under construction and scheduled for completion in 2014 for passenger traffic between Lanzhou and Urumqi (over 1776km) in Xinjiang (such that the old rail link will not be shared with passengers and can be dedicated to freight). By 2020, Xinjiang expects to have 4 rail gateways to inland China and 4 circular railways covering all the major cities in its Province.

Also in early July 2013, an announcement was made of a proposed rail link between Urumqi via Kashgar (in Xinjiang, adjacent to Tajikistan) and then 2038km through Khunjerab to the Pakistani Port of Gwadar (now under control of China - since October 2012). If a railway was built, it has been estimated that it would reduce the current travelling time of about 1 month down to ~10 days.

China also intends to construct railways in Africa, partly to transport its own commodities to African ports and then initially by sea to China, while high speed rail connections are under discussion via Laos to Bangkok in Thailand. China has the capability of constructing high speed rail "at speed" as we have seen in the network created in China so far (see Goode News in the May 2013 issue of Paydirt and since then on 1 July 2013, a new high speed link has been opened between Nanjing and Hangzhou).

As we commented in our China visit review to China Mining, Chengdu and Chongqing available under "Comments" on the www.eagleres.com.au website, after a while it is easy to spot the bullet train lines (from the air) weaving in almost straight lines across China, with their regularly supported tracks even across fairly flat countryside. Figure 1 clearly shows the support pillar construction with scaffolding, then reinforced steelwork, then concrete, and final product, according to a set spacing.

We also commented in that article and our column in Paydirt's April 2013 issue, that China did not see why it had to pay high commodity prices for its own demand, and that commodity prices were going to fall in 2013 - which they have. Any falls like the GFC and Euro crisis were "seen" as bargain opportunities to acquire resources cheaply - so undoubtedly will be the current gold  / commodity price weakness.

China has a 20 to 50 or even a > 100 year outlook when it buys projects and many have been questioning recent acquisitions of high cost gold mines in Australia and Africa, but who knows what the gold price is going to be in 20 or 50 years' time.

As for the Yuan or Renminbi, becoming a reserve currency is simply a case of time, supposedly 2015. Given the gold-backing of the US$, China is very probably taking delivery of physical gold to have sizeable gold reserves in 000't. However, we do not expect China to make an announcement about any change in its gold holdings until it is ready to do so, and that could be in 2015 or later.

It is not in China's interest to state that they have been acquiring gold, as the gold price would probably increase. It all comes down to how China does business applying the 36 strategies of the "Art of War" which we referred to after attending the RES Symposium conference in Broken Hill in 2012 and contained in our column in the June 2012 issue of Paydirt.

Remember what happened in 2012 to iron ore prices, which collapsed and then rebounded with import figures near the end of the year showing a net increase in demand, not a fall. Producers were stating that demand for their products had not stopped - and they were right. China clearly bought "big time" when the iron ore prices were low.

China is going to consume commodities for at least the next 10 to 20 years, although some may be sourced from resources that it has bought in other parts of the world. It has to be recognised that China will try and keep a lid on commodity prices whenever it can - nothing personal, but it's all part of the "Art of War" in doing business.

As someone recently said to us "At the end of September 2013, we'll probably look back and wonder what all the commodity price fuss was about".

China is motoring along to become the 21st Century nation of the world, don't focus just on its GDP numbers, China's train is leaving the station and taking the rest of the world with it. You have a choice : climb aboard or watch it disappear into the distance.

Disclosure and Disclaimer : This article has been written by Keith Goode, the Managing Director of Eagle Research Advisory Pty Ltd, (an independent research company) who is a Financial Services Representative with Taylor Collison Ltd.

Figure 1. Constructing Bullet train lines in China