CANBERRA -- The fundamental strength of the Chinese economy lies in its strategic policy settings and in the leadership's knowing when to change those settings, says former Australian Prime Minister Kevin Rudd.

Rudd, probably the best known Mandarin-speaking politician in the Western world, made the remarks during a recent interview with Xinhua.

"Chinese people are very intelligent. The Chinese leadership is very intelligent. They've worked out the core challenge through the five-year plan, which is to change China's economic growth model," Rudd said.

He added that the current economic model served China well during the past 30 years until 2008.

Now, Rudd said, China is establishing a new model by transferring a driver of growth from investments to consumption.

"The old model has been very effective but its time has come and gone," Rudd said. "Therefore China is moving to a new model. The challenge for the Chinese leadership is to implement that transition effectively. All the other elements that go to China's current economic success will depend on the successful nature of that transition."

Rudd is expected to visit China's southwestern city of Chengdu in early June to attend the Fortune Forum there.

Recalling his first trip to Chengdu in 1986, Rudd said the city has since changed a lot.

"It's a massive city and it's a modern city," he said, noting Australia's recent decision to establish a consulate-general there.

As for the disparity between China's east and west, Rudd said the question of the divide between China's coastal, hinterland and western provinces has been a debate that's gone on for the past 20 years.

"What I do see as a product of that debate is much higher levels of state investment and private investment in the hinterland provinces and in the western provinces," Rudd said.

The former prime minister called for Australians and the rest of the world to better understand China's hinterland and its west as individual regional economies.

"If you look at the Sichuan basin and the 100 million people who live in Sichuan, frankly this is a large sub-economy itself," Rudd said. "People should look beyond Shanghai and Guangzhou. They should even look beyond Jiangsu, Zhejiang, Fujian, Shandong and the rest of Guangdong (all coastal provinces in China).

"There's a big place out there and it's called Sichuan and it's the gateway to China's west," Rudd said.

Rudd noted that the centers of global wealth have changed throughout history, "so there's nothing extraordinary about this. It's quite normal."

"The key question however is whether the transitions between economic powers, political powers and strategic powers from one power to another can be achieved peacefully and in a stable manner or not," Rudd said.

That, Rudd said, means changes in the international power of relativity that don't necessarily result in conflict.

"I think there's a lot of wisdom in that," Rudd said.