Cut-throat Chinese politics, and not a broader ideological battle, probably led to Bo Xilai's banishment from the top ranks of China's Communist Party this week, former U.S. Ambassador to China Jon Huntsman said on Thursday.

To me, it really is an opportunity for America to kind of peek beyond the velvet curtain into Chinese politics and see how ruthless it is, Huntsman said in response to a question at the U.S. Export-Import Bank's annual meeting.

The decision to cast out Bo Xilai from the party's central committee follows his removal in March as party chief of Chongqing, a sprawling municipality in southwest China.

The brash and controversial politician has been at the centre of an unfolding scandal that led this week to his wife, Gu Kailai, being detained on suspicion of murdering British businessman Neil Heywood.

Before his fall, Bo was widely seen as a contender for a post in China's top leadership committee, which will be decided later this year.

I'm guessing that much of what we're seeing is inexorably tied to the party leadership changes in October, Huntsman said. His rivals collected the information, moved in on him and this is the way they are. This is local politics in China.

My guess is Bo Xilai will probably not be rehabilitated anytime soon and he will be used as a poster child for corruption through the end of the year, Huntsman said.

Huntsman served as U.S. ambassador to China from 2009 to 2011, before returning to the United States to launch what was ultimately an unsuccessful bid for the Republican party's presidential nomination.

He acknowledged speculation that Bo's ouster was the result of an ideological battle over the China's future, but said he doubted that was the case.

I think it's fairly isolated to the rise of a compelling politician, a charismatic politician and one who built up a fair share of antagonists along the way, (who) had been slated for a very important seat. A lot of others are gunning for that seat too, and so you had enough in the way of evidence to roll him, Huntsman said.

The former Utah governor and businessman said China was entering a period of potentially tremendous change with a new generation of leaders rising to power.

Unlike their elders, their views of China and its role in the world have been shaped by more than 30 years of economic growth in the range of 8 to 10 percent, he said.

Therefore, I think we're up against a generation a little more hubristic and a little more nationalistic, he said.

Still, Huntsman said he saw a huge opportunity for the United States to forge a much strategic relationship with China after its current leader-in-waiting Xi Jinping takes power.

My guess is by middle-2013 Xi will be ready to move out and begin a process of some liberalization, he said.

(Editing Editing by Philip Barbara)