President Xi Jinping praised the "remarkable contributions" of late leader Deng Xiaoping and called for the advancement of socialism with Chinese characteristics initiated by Deng. The remarks were made as the nation commemorated Deng's 120th birth anniversary on Thursday.

The socialist market economy played an important role in Deng's promotion of socialism with Chinese characteristics, embodying the principle of seeking truth from facts.

During his tour of southern China in 1992, Deng said that the proportion of planning to market forces is not the essential difference between socialism and capitalism. A planned economy is not equivalent to socialism, because there is planning under capitalism too; market economy is not capitalism, because there are markets under socialism too. Planning and market forces are both means of facilitating economic activity.

He explained the relationship between socialism and market economy, dispelling stereotypes and misunderstandings.

Deng understood and correctly handled the relationship between market economy and socialism while addressing the major issues of developing a market economy in socialist China, and creating institutional conditions for liberating and developing the productive forces.

The Party continues to adhere to the principle of seeking truth from facts, understands the laws of market economy, correctly handles related problems and promotes the integration of market economy and socialism.

China's socialist market economy has achieved the organic integration of the public sector and market economy, which stimulates the vitality of the public economy and expands the space for the development of the nonpublic sector.

History shows market economy is the most effective way of allocating resources. Although a capitalist market economy can create huge amounts of wealth, the profit-seeking nature of capital and the antagonistic production relations have caused periodic economic crises and polarization in the past, putting humans and nature at risk.

The planned economy, which China adhered to after the founding of the People's Republic in 1949, boosted the rapid development of the productive forces during a specific period, but it started to hinder the development of the productive forces and economic growth. Therefore, the Party led by Deng summarized the experience of socioeconomic development from 1949 to the period before the launch of reform and opening-up. And the Party proposed to develop market economy in socialist China.

The Party has made it clear that the public and nonpublic sectors should play their respective roles in promoting high-quality development. In fact, the Party has been endeavoring to develop a higher-level socialist market economic system. Since the launch of reform and opening-up in 1978, China's rapidly growing economy has improved people's livelihoods and living standards.

And thanks to people's rising incomes, the principal contradiction facing Chinese society has evolved from that between the ever-growing material and cultural needs of the people and backward social production to that between unbalanced and inadequate development and the people's ever-growing needs for a better life.

The Party has also vowed to address the problems concerning social fairness, common prosperity, market efficiency and environmental pollution by further deepening reform.

Since the 18th National Congress of the CPC in 2012, the Party leadership has not only implemented a series of measures to consolidate the achievements of the socialist market economy over the past decades, but has also put forward a range of new initiatives to build a high-standard socialist market economic system and drive high-quality development.

More importantly, the decisions made at the third plenary session of the 20th CPC Central Committee, held in July, emphasized the importance of continuing to "free our minds, seek truth from facts, move with the times, and take a realistic and pragmatic approach, as we work to further unleash and develop the productive forces and tap into and boost the vitality of our society". The plenum also made it clear that "by 2035, we will have finished building a high-standard socialist market economy in all respects, further improved the system of socialism with Chinese characteristics".

However, it is also necessary for the Party to adhere to the "four-sphere confidence" policy, that is, to have confidence in the path, theory, system and culture of socialism with Chinese characteristics, and stay clear of stereotypes and dogmatic views.

Zhou Yuehui is a professor of economics at the Party School of the Communist Party of China Central Committee; and Hu Chuanxu is a postgraduate student at the same school. The views don't necessarily reflect those of China Daily.

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