Editing 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]].

An important component of existing socialist [[Political_economy|economy]] is its [[Contradiction|contradictory]] character. As a step from capitalism towards [[communism]], [[Socialism|socialist]] [[Actually_Existing_Socialism|economies]] have elements of [[capitalism]] and elements of [[communism]], thus [[private property]] is not fully abolished, only in part. This contradiction gives rise to [[class struggle]] which can manifest in the contradiction between [[revisionism]] and [[anti-revisionism]] in the higher bodies of leading [[Communist party|communist parties]].

== Description ==
The economic reform toward a socialist market economy is underpinned by the [[Marxism|Marxist]] framework of [[historical materialism]]. In the late 1970s, then-Chairman [[Deng Xiaoping]] and the Communist Party leadership rejected the prior [[Maoism|Maoist]] emphasis on culture and political agency as the driving forces behind economic progress and started to place a greater emphasis on advancing the material productive forces as the fundamental and necessary prerequisite for building an advanced socialist society. The adoption of market reforms was seen to be consistent with China's level of development and a necessary step in advancing the [[productive forces]] of society.

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.

== Analysis ==
Western observers and scholars have described China's economic system as a form of state capitalism, particularly after the industrial reforms of the 1980s and 1990s, noting that while the Chinese economy maintains a large state sector, the state-owned enterprises operate like private-sector firms and retain all profits without remitting them to the government to benefit the entire population.

== Economic planning ==
By the early 1990s, [[Soviet-type economic planning]] had been replaced with market relations and markets became the fundamental driving force in the socialist market economy, with the State Planning Commission being reformed into the National Development and Reform Commission in 2003. Indicative planning and [[Industrial policy|industrial policies]] have substituted [[material balance planning]] and play a substantial role in guiding the market economy for both the state and private sectors. The planning system consists of three layers, with each layer using a different planning mechanism.

Compulsory planning is limited to state-owned enterprises operating in strategic sectors, including research, education and infrastructure development plans.
[[Category:Market socialism]]