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.
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;