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.
History of the People's Republic of China (1949–1976)
President Nixon made his historic trip to Beijing in February 1972 and met with Zhou and Mao. The trip caused some confusion in the communist world. The Soviet Union could not outright condemn it, but they clearly felt that the US and China were both plotting against them. North Korea viewed it as a victory for socialism (under the reasoning that the US had failed in its attempt to isolate China and was forced to come to terms), while North Vietnam, Albania, and Cuba felt that China had made a mistake by negotiating with the enemy. It also had a demoralizing effect on Taiwan, whose leadership had sensed the inevitable, but who were nonetheless upset at not having been consulted first. With the Nixon visit, most anti-American propaganda disappeared in China. The US was still criticized for imperialism, but not to the degree it had been before 1972. Instead, Soviet revisionism and "social imperialism" was now seen as China's main enemy.