Socialist market economy
The socialist market economy is seen by the Communist Party of China as an early stage in the development of socialism (this stage is variously called the "primary" or "preliminary" stage of socialism), where public ownership coexists alongside a diverse range of non-public forms of ownership. The Communist Party of China maintains that despite the co-existence of private capitalists and entrepreneurs with public and collective enterprise, China is not a capitalist country because the party retains control over the direction of the country, maintaining its course of socialist development. Proponents of this economic model distinguish it from market socialism as market socialists believe that economic planning is unattainable, undesirable or ineffective and thus view the market as an integral part of socialism whereas proponents of the socialist market economy view markets as a temporary phase in development of a fully planned economy.
History of the People's Republic of China (1949–1976)
President Nixon made his historic trip to Beijing in February 1972 and met with Zhou and Mao. The trip caused some confusion in the communist world. The Soviet Union could not outright condemn it, but they clearly felt that the US and China were both plotting against them. North Korea viewed it as a victory for socialism (under the reasoning that the US had failed in its attempt to isolate China and was forced to come to terms), while North Vietnam, Albania, and Cuba felt that China had made a mistake by negotiating with the enemy. It also had a demoralizing effect on Taiwan, whose leadership had sensed the inevitable, but who were nonetheless upset at not having been consulted first. With the Nixon visit, most anti-American propaganda disappeared in China. The US was still criticized for imperialism, but not to the degree it had been before 1972. Instead, Soviet revisionism and "social imperialism" was now seen as China's main enemy.