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)
China became almost totally cut off from the outside world in the late 1960s and only retained diplomatic relations with a few countries. The United States was denounced for imperialism, Britain for colonialism, Japan for militarism, and the Soviet Union for revisionism. Most of the communist world was stunned and horrified by the Cultural Revolution. This led to China dividing fellow communist nations into three groups. Cuba, Romania, North Korea, and North Vietnam were classified as "mostly socialist with a few mistakes". The USSR, Mongolia, Poland, Czechoslovakia, Bulgaria, East Germany, Hungary, and Yugoslavia were classified as revisionists who pursued a false socialism. China itself and Albania were seen as the only true socialist countries in the world.