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.
Constitution of the People's Republic of China
Article 1 of the State Constitution describes China as "a socialist state under the people's democratic dictatorship" meaning that the system is based on an alliance of the working classes—in communist terminology, the workers and peasants—and is led by the Communist Party, the vanguard of the working class. Elsewhere, the Constitution provides for a renewed and vital role for the groups that make up that basic alliance—the CPPCC, democratic parties, and mass organizations. The 1982 Constitution expunges almost all of the rhetoric associated with the Cultural Revolution incorporated in the 1978 version. In fact, the Constitution omits all references to the Cultural Revolution and restates Chairman Mao Zedong's contributions in accordance with a major historical reassessment produced in June 1981 at the Sixth Plenum of the Eleventh Central Committee, the "Resolution on Some Historical Issues of the Party since the Founding of the People's Republic."