Question

Before 1990s, nearly all socialist countries have planned economy. Since 1990, China started to introduce markets and private sectors. Do you think Chinese economic system is market socialism or not?

Answer 1

The Socialist Market Economy (SME) is the economic system and economic development model used in the People's Republic of China. The system is based on the predominance of public ownership and state-owned enterprises in the market economy. The word "socialist market economy" was introduced by Jiang Zemin at the 14th National Congress of the Communist Party of China in 1992 to describe the goal of China's economic reforms. The socialist market economy, which originated in the 1978 Chinese economic reforms that incorporated China into the global market system, represents a preliminary or "main level" of social growth. In spite of this, many Western analysts have identified the system as a form of state capitalism.

A large portion of China's economy is still under government influence, although the number of government programs has decreased significantly. Universal health insurance, for example, is abolished. China's foreign policy remains pro-socialist, but it has become largely a free-market economy. In fact , China is no longer a "pure capitalist economy."

Indeed, China has changed from a "socialist economy" to a "socialist market economy." The Communist government in China quickly realized that it would be to its detriment to keep China's economy apart from the rest of the world. Since then, it has been able to effectively strike a balance between "collective" and "capitalist" approaches. Policies make it possible for businessmen and investors to make money, but under state regulation. About 2004, the government started to grant a individual the right to private property. Establishing a special economic zone and opening up to international trade have enabled the country to embark on rapid economic growth.