BEIJING -- Ethical leadership, discipline and entrepreneurial spirit: this will propel China forward, according to leading political scientist Graham Allison.

In an interview with Xinhua in Beijing, the founding dean of Harvard Kennedy School said the country will benefit from leaders with high ethics and an enlightened sense of the country's interests.

But he said creating and sustaining such leaders will be a challenge. Allison is one of the authors of "Lee Kuan Yew: The Grand Master's Insights on China, the United States, and the World."

In the book, Lee Kuan Yew, the founding father of modern Singapore, is quoted as saying "what a country needs to develop is discipline more than democracy."

Allison said it boils down to creating "ethical leadership," which is?"a competitive advantage" for a country.

"If you have a competent and benevolent leadership, discipline beats democracy for development," he said.

He cited the fast-growing country of Rwanda as an example, where President Paul Kagame has enforced social discipline in order to boost the country's development.

But ethical leadership means eliminating corruption and that remains a difficult task, said Allison.

He said a stable and predictable legal system and clear administrative rules will create an environment which stymies corruption, and help China's market economy function better in the process.

Singapore uses a system of meritocracy where people are rewarded for their abilities rather than their family connections.

It's a system which rewards the brightest and the best, regardless of their ethnic and social-economic background.

Allison said it's fair competition like this society should encourage. Championing initiative and an entrepreneurial spirit helps bring out the best in people, while also prevents social and economic inequality.

This month, the Communist Party of China will hold a key meeting to discuss further reform efforts.

Known as third plenary sessions, historically the meetings often result in significant economic policy changes in China.

The third plenary session of the 11th CPC Central Committee in 1978 resulted in China's opening up to the world, after former leader Deng Xiaoping launched the historic reforms.

They fundamentally reshaped China, allowing it to develop rapidly since that time.

According to Allison, the meeting this month may ignite "the biggest changes you see in the economy of China, maybe since Deng Xiaoping."

He agrees with the Chinese government's policies to boost domestic consumption, claiming an economy driven largely by consumer demand, rather than export growth, will be a big step for the country.

He also said China should make room for more private, small and medium-sized companies, as well as reducing the influence and power of state-owned enterprises.

The recently opened Shanghai Pilot Free Trade Zone marks China's next phase of financial reform and economic experimentation.

Over 200 companies have registered in the zone since it opened one month ago, including top financial institutions like Citibank.

Allison said the FTZ is a sign of China's continued willingness to further open the country's economy and increase foreign competition within it.

He said this month the world can only expect more significant reforms in the Chinese financial market.