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.
Ten Major Relationships
In terms of economic development, China had followed the Soviet model of socialism ever since Mao's decision to lean on the side of the Soviet Union. As his speech On the People's Democratic Dictatorship (论人民民主专政) in June 1949 states,“We must learn to do economic work from all who know how, no matter who they are. We must esteem them as teachers, learning from them respectfully and conscientiously. We must not pretend to know when we do not know. We must not put on bureaucratic airs. If we dig into a subject for several months, for a year or two, for three or five years, we shall eventually master it. At first some of the Soviet Communists also were not very good at handling economic matters and the imperialists awaited their failure too. But the Communist Party of the Soviet Union emerged victorious and, under the leadership of Lenin and Stalin, it learned not only how to make the revolution but also how to carry on construction. It has built a great and splendid socialist state. The Communist Party of the Soviet Union is our best teacher and we must learn from it. The situation both at home and abroad is in our favour, we can rely fully on the weapon of the people’s democratic dictatorship, unite the people throughout the country, the reactionaries excepted, and advance steadily to our goal.”Following Mao's visit to Moscow from late 1949 to early 1950, on February 14, 1950 the two countries signed the Sino-Soviet Treaty of Friendship, Alliance and Mutual Assistance (中苏友好同盟互助条约) which promised the Soviet Union's commitment to help build socialism in the newly founded People's Republic of China. From 1950 to 1956, a total of 5,092 Soviet experts were sent to China for technical assistant and the total number of visits of the Soviet experts was over 18,000 throughout the years. The areas they provided assistance included government bureaus, military, large enterprises, and higher institutions. In the countryside, from late 1955 to early 1956, China's agricultural sector completed the Socialist High Tide, transforming from having only 14.2% (16.9 million out of 120 million) of peasant families collectivized to 91.2% of them joining the co-operatives and 61.9% joining collectives. Likewise in the cities, private factories and shops were either turned into cooperatives or nationalized in the name of joint public-private ownership.