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.
Chinese social structure
In a speech made shortly after the communist's victory in 1949, Mao Zedong claimed that Chinese society had four distinct social classes; this is often cited as the reason why the Chinese flag has four small stars on it. In his On the People's Democratic Dictatorship speech he defined the Chinese people as consisting of four social classes, also referred to in Asian cultures as the four occupations (士農工商) shi, nong, gong, shang ("the working class, the peasantry, the urban petty bourgeoisie and the national bourgeoisie". Mao made the claim that these classes had been unified by the revolution, but severe class stratification still existed in post 1949 China, especially when comparing the rights ordinary citizen to the extreme privileges afforded to the elites of the Communist party.