Analysis of the innovation and development of the socialist market economy theory

Purpose As a major theoretical breakthrough of the Marxist political economy based on the practice of China’s reform and opening up, the theory of socialist market economy constitutes an important part of the political economy of socialism with Chinese characteristics. The paper aims to discuss this issue. Design/methodology/approach Its essence is that socialism (as a social system) and market economy (as a resource allocation mechanism) can be organically integrated to exert the advantages of both at the same time and generate new institutional and systematic advantages. Findings It has condensed many important theoretical viewpoints, involving major theoretical and practical issues, such as the relationship between the government and the market, the basic economic system, the income distribution system, the operation of the market economy and the opening up to the outside world, which have become the basic principles of socialist political economy with Chinese characteristics. Originality/value The new practice of comprehensively deepening reform and building a moderately prosperous society in an all-round way is bound to provide an impetus to the deepening and systematization of the theory of socialist market economy.