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.
Communist state
During the 20th century, the world's first constitutionally socialist state was in Russia in 1917. In 1922, it joined other former territories of the empire to become the Union of Soviet Socialist Republics (USSR). After World War II, the Soviet Army occupied much of Eastern Europe and thus helped establish Communist states in these countries. Most Communist states in Eastern Europe were allied with the Soviet Union, except for Yugoslavia which declared itself non-aligned. In 1949, after a war against Japanese occupation and a civil war resulting in a Communist victory, the People's Republic of China (PRC) was established. Communist states were also established in Cambodia, Cuba, Laos and Vietnam. A Communist state was established in North Korea, although it later adopted its own ideology called Juche. In 1989, the Communist states in Eastern Europe collapsed under public pressure during a wave of non-violent movements which led to the dissolution of the Soviet Union in 1991. Today, the existing Communist states in the world are in China, Cuba, Laos and Vietnam.