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
The concept of a primary stage of socialism was developed mainly by Xue Muqiao and Su Shaozi. The concept began to evolve when the new post-Mao leadership of Deng began questioning Mao' assertion that "class struggle as the key link". Su, coauthoring with Feng Langrui, published an article in "Economic Research" () in 1979 which called into question the Chinese socialist project by using Marxist methodology. The article analyzed the basis of Chinese socialism by looking at Karl Marx's writings; Marx drew a distinction between lower-stage communism (commonly referred to as the socialist mode of production) and higher-phase communism (often referred to as simply communism). Su's and Feng's article created three subdivisions within the socialist mode of production; the first phase was the transition from the capitalist mode of production to the socialist mode of production; which was (a) the phase in which the proletariat seized power and set-up the dictatorship of the proletariat and (b) in which undeveloped socialism was created, the second phase was advanced socialism (the socialism of which Marx wrote about). They argued that China was an undeveloped socialist nation since;