The new Chinese leader, Xi Jinping, will focus on further economic reforms, work on a new economic model to sustain growth, undertake further reforms in financial services and currency markets, said Kevin Rudd, former Prime Minister and Foreign Minister of Australia.

He was delivering the Second International Institute for Strategic Studies (IISS) Oberoi Lecture on ‘China's Leadership Transition and the Future of a Rising Power’ last evening at The Trident, Mumbai.

Rudd clarified later while fielding questions from the audience, that while changes were likely, this would not mean that the currency would be on a free float, but that the float would be under a wider band.

He said that there had already been a significant appreciation in the Chinese currency over the past five years and the tensions between US and China on this issue were less than some years ago.

Attaching a lot of significance to Xi Jinping’s visit to Shenzhen last week, the first trip inside China after he took over as Chinese Communist Party’s General Secretary, Mr Rudd said that he echoed Deng’s speech at the same venue two decades earlier. Terming those reformist steps as correct, Xi had said that “'we must open the economy even more’’.

Rudd said that he expected Xi to focus on completing the process of economic transformation and taking China to a sustainable middle-income country status during his first term. He expected him to embrace the task of political reform in his second term.

Drawing up a likely scenario, Rudd said that this might include a political confederation with Taiwan in future. Under the arrangement, there could be one country and three systems possible. (The allusion was to the current system of one country and two systems arrangement with Hong Kong).

Rudd called for more confidence-building measures and transparency between countries in East Asia and China to avoid conflict by miscalculation.

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