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.
Wartime perception of the Chinese Communists
In the 1944 Dixie Mission, US Colonel John Service visited the Communists and praised them, claimed that they were democratic reformers, likening them to European socialists rather than Soviet Communists and claimed that they were less corrupt and chaotic than the Nationalists, and that they would preserve levels of capitalism for an extended time until a peaceful transition to a fully realized communist society.