China is dead serious in embracing free trade - the core element of capitalism - more so with the United States even as the two nations have yet to formally settle their trade disputes.

This was revealed Tuesday by former AIG boss Maurice Greenberg, who Reuters said enjoys considerable access on the present batch of rulers in Beijing.

According to Greenberg, who now heads the Starr International Company, the current crop of China's leadership - headlined by Premier Wen Jiabao, Premier-apparent Li Keqiang and President-apparent Xi Jinping - were reform-focused and likely to continue on the economic path that saw China surging into the second spot of the world's biggest economies.

Li and Xi, Greenberg claimed, were particularly smart and appear keen on sustaining the policies that great wealth and influence to the Asian behemoth.

Any suggestion countering the present economic path of China has been neutralised with the recent ouster of Bo Xilai, who headed the Communist Party in Chinese city of Chongqing but was unceremoniously eased out of his position in March.

Bo, media reports said, gained popularity by reportedly promoting the ideals that were attributed to the disastrous Chinese Cultural Revolution in the mid-1960s, which the present Chinese leadership disapprove of, Greenberg said.

"His behaviour, singing Mao songs and wanting to go back to that era, was just the wrong way to do ... You don't go around trying to promote yourself to a political position in China. That doesn't fly," the American executive told Reuters.

Beijing, Greenberg stressed, is more concerned on furthering its present economic status, with the incoming leaders reportedly expressing openness in instituting economic reforms, including the elimination of so-called state-owned enterprises (SOEs), blamed by economist for breeding favouritism.

"There'll be less emphasis on SOEs than there has been historically, and there'll be more emphasis on small and medium-sized companies," Greenberg said.

Greenberg added that the new Chinese leaders appear to have realised that "the SOEs have been sopping up virtually all of the liquidity out of the banks and that small and medium-sized companies have to go to the secondary markets where they pay huge interest rates, which keeps them from developing."

Specifically, Greenberg hinted that the West can relish on the possibility that Li is reform-oriented and in "my own belief is that he's less devoted to state capitalism than has been their strong trend."

Under Li's watch, Greenberg believes that the U.S. and China could even reach the point of forging a free trade deal, which when discussed soon should be wrapped up before the current decade ends.

"The Chinese would negotiate a free trade agreement with the United States and they would start immediately to have talks to see if it can be negotiated," Greenberg said.

Glaring indicators of this is China's willingness to crackdown on piracy activities inside the country, which U.S. officials said lead to billions of losses for American firms.

To deal with the problem, Greenberg said China has launched operations against copyright violators, stressing "I believe they're sincere in trying to enforce the rules on intellectual property."

"They're committed to eradicating all intellectual property misbehaviour and they'll be very harsh on those who continue to do it," he added.

The Chinese Commerce Minister is ready to commence discussions with his U.S. counterpart and "start negotiating tomorrow if the U.S. were prepared to do so," Greenberg said.