Socialist market economy
The socialist market economy (SME) is the economic system and model of economic development employed in the People's Republic of China. The system is based on the predominance of public ownership and state-owned enterprises within a market economy. The term "socialist market economy" was first used during the 14th National Congress of the Communist Party of China in 1992 to describe the goal of China's economic reforms. Originating in the Chinese economic reforms initiated in 1978 that integrated China into the global market economy, the socialist market economy represents a preliminary or "primary stage" of developing socialism. Despite this, many Western commentators have described the system as a form of state capitalism.
History of the People's Republic of China (1976–1989)
In late 1978, many emboldened people began staging rallies and protests in Beijing. They erected a large number of wall posters (the so-called "Democracy Wall") criticizing the Cultural Revolution, Mao Zedong, the Gang of Four, and Hua Guofeng. All these were tolerated because of being more-or-less in line with official positions, but some began calling for democracy and open elections. This was more than the authorities were willing to tolerate and they quickly stressed that the party would continue to hold power and guide the nation towards socialism. While greater freedom of thought would be allowed, loyalty to the party and socialist thought would still be required. Nonetheless, writers began criticizing corruption, privileges enjoyed by party officials, and unemployment, all things that supposedly could not exist under socialism. It was now officially admitted that 20 million Chinese were unemployed and 100 million did not have enough food to eat.