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.
Ideology of the Communist Party of China
In 2007, Hu Jintao noted in a speech that "people's democracy is the lifeblood of socialism ... without democracy there can be no socialism, and there can be no socialist modernization." To be clear, democracy, in the CCP's understanding of the word, does not mean democracy as practiced in liberal democracies. Instead it means the creation of a more balanced, equal society, "with socialism bringing about social justice. The CCP still believes that the Party and country is led by the unity of the peasant and working classes. However, for the further development of democracy and socialism, stability is needed.
Yang Xiaoqing in the article "A Comparative Study of Constitutional Governance and the People's Democratic Regime", published in the party's journal "Seeking Truth from Facts" in 2013, argues that the people's democratic dictatorship and Western constitutional government are mutually exclusive. She notes, in line with classical Marxist theory, that constitutionalism in general fits with the capitalist mode of production and bourgeois democracy, and does not fit in with China's socialist system of people's democratic dictatorship. Constitutional government has a market economy in which private property plays the predominant role, as the basis unlike the Chinese socialist market economy in which public ownership is the basis. The rallying cries of the liberal revolutions in the 17th and 18th century she notes was "Private property is sacred and inviolable, and constitutional governance was established around this premise. While things have changed since the 17th and 18th centuries the basic premise remains the same in Western societies; a small government which protects the interests of private property.