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.
Socialism with Chinese characteristics
Mao said that the imposition of "progressive relations of production" would revolutionize production. His successor's rejection of this view according to A. James Gregor has thwarted the ideological continuity of Maoism—officially Mao Zedong Thought. Classical Marxism had argued that a socialist revolution would only take place in advanced capitalist societies and its success would signal the transition from a capitalist commodity-based economy to a "product economy" in which goods would be distributed for people's need and not for profit. If because of a lack of a coherent explanation in the chance of failure this revolution did not occur, the revolutionaries would be forced to take over the responsibilities of the bourgeoisie. Chinese communists are thus looking for a new Marxist theory of development. Party theorist Luo Rongqu recognized that the founders of Marxism had never "formulated any systematic theory on the development of the non-Western world" and said that the Communist Party of China should "establish their own synthesized theoretical framework to study the problem of modern development". According to A. James Gregor, the implication of this stance is that "Chinese Marxism is currently in a state of profound theoretical discontinuity".