The new Chinese leader Xi Jinping will focus on further reform of the economy, 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’, here at The Trident.
Rudd clarified later while fielding questions from the audience, that while changes were likely, this would not mean that the Chinese yuan 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 there was less tension between US and China on this issue 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, Rudd said that he echoed Deng’s speech at the same venue two decades ago. 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 the 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.
It was possible that under this arrangement, there could be one country and three systems. (The allusion was to the current system of one country and two systems arrangement with Hong Kong.)
Rudd said that given the brittle policy environment, there was need for more confidence building measures and transparency between countries in East Asia and China in order to avoid conflict by miscalculation.