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.
Communist state
During the 20th century, the world's first constitutionally socialist state was in Russia in 1917. In 1922, it joined other former territories of the empire to become the Union of Soviet Socialist Republics (USSR). After World War II, the Soviet Army occupied much of Eastern Europe and thus helped establish Communist states in these countries. Most Communist states in Eastern Europe were allied with the Soviet Union, except for Yugoslavia which declared itself non-aligned. In 1949, after a war against Japanese occupation and a civil war resulting in a Communist victory, the People's Republic of China (PRC) was established. Communist states were also established in Cambodia, Cuba, Laos and Vietnam. A Communist state was established in North Korea, although it later adopted its own ideology called Juche. In 1989, the Communist states in Eastern Europe collapsed under public pressure during a wave of non-violent movements which led to the dissolution of the Soviet Union in 1991. Today, the existing Communist states in the world are in China, Cuba, Laos and Vietnam.