In early fifties, the political economy of socialism was introduced in China on a wider scale.

Socialism found its way to China in the form of Soviet, which was part of the framework of Soviet economic and political assistance after Liberation in 1949 (also known as Chinese Revolution). This system theory was presented as the Marxist theory on the political economy of socialism and was explained by Soviet manuals in Political Economy: A textbook which was published in 1954. However, before the book came to China, the idea of system theory already existed through the idea from Stalins pamphlet called Economic Problems of Socialism in the USSR (1952) which was meant as guidelines for the authors of the Textbook. Yet, the usage of the Textbook in China before 1959 was questionable. There was no evidence that China applied the concept of socialism until Mao Zedong followed the translation of the third edition of the Textbook and then criticized it in his Reading Notes. The concept of system theory was influenced by the classical writings of Marxism to present socialist political economy as a rational entity and a scientific system. Under the system, social development is determined by two (2) different categories of objective laws which are first; the general law where it operates through all known modes of production, and second; via the specific law. Under specific law, it demonstrates socialism as an independent and relatively stable social formation with its own set of objective law. Even though socialism is considered as an independent social formation, there still exist categories such as money, commodities and values. However it is claimed that they too exist in a purified form that are free from capitalist element. So, according to the system theory, as long as these laws are understood and applied precisely, socialist production will be able to develop smoothly. As system theory was influenced by Soviets Textbook, Chinese version of system theory was basically equal to the Soviet original, but it had applied in different social and history context. Mao Zedong extremely criticized and opposed both, system theory and theory of market socialism. He then came out with a theory on the growth of new classes within socialist society with a socialist economy as the material foundation. It was generative class theory. The generative class theory was developed through not less than 3 phases. First, phase was before 1958 where Mao argued that class struggle continues in socialist society even after the transformation of the ownership system and that revolutionizing production relations

was an essential requirement to promote an extensive development of social productive forces, i.e.: economic growth. He also came to the concept of revisionism, which he believed that it was excluded from the system theory. The second phase of Maos criticism was in 1958 and 1959. In his Reading Notes (1960), socialism believed to be an independent mode of production. He initiated that socialism is dominated by contradictions between economic base and superstructure, between forces and production relations and within production relation themselves. Thus, he considered social and class contradictions to be motivating factor in development of social and economy. According to him, since the law was made only by man, one is not allowed to become a slave for another. Mao specified that the major development in productive force always come after changes in production relations. The process of revolutionizing production relations is a process of concurrently changing the ownership system, mutual relations within production and system of redistribution of social conduct. Mao strongly rejected the revolutionary and mechanistic beliefs inherent in the system theory. Instead, he pointed out the need for concurrent revolutionizing of all aspects of production relation. After1961, Mao was focusing on China internal problem such as the nature of class struggle. As the consequences, it led to the formulation of generative class theory around 1964 and 1965. He pointed out that in1950, bourgeoisie still exist and the contradiction between proletariat and bourgeoisie still continued to exist during the system theory. He claimed that there were vested interest group in socialist society trying at each other new phase of social development to exert their influence to consolidate development and prevent further changes in order to protect their own vested interests and privileges. In early 1962, Mao argued that in socialist society, the working class was challenged with new bourgeoisie element generated within the given social framework and these were also to be found within the Communist Party. In August 1962, he stated that class struggle most was aimed at new non socialist forces, i.e. new bourgeoisie element and people walking the capitalist road. In December 1964, Mao refused to admit that a new class of society, the new bourgeoisie, was existed in China. His focused was on the people in power within the communist party. They were identified later in December that year as the protagonists of capitalist policies and branded "people in power within the communist party walking along the capitalist road. Thus, he then formulated the generative class theory. By identifying the communist party as the nodal point in the overall

social process whereby the new bourgeoisie was generated, Mao not only presented as a new conception of socialist society, yet he also provided the guideline for future political struggle in China. Maos generative class theory had cause cultural revolution where he designed Cultural Revolution to reinforce socialism by removing capitalist in China (the bourgeoisie). He thought that a greater threat to China came from the people within the communist party. He was in the view that a renewal or revolution of culture is needed to get rid of those people who had capitalist mind. Therefore, during the culture revolution, a group of people know as red guard was established and they struggled against authority at all levels of society. They simply raided the house, arrest and punish people without reasons and raped women to humiliate them. There was no legal procedure at all during the time where justice was only a theory. Court was closed and all legal personnel were sent to countryside to be rehabilitated and did labour work. The cultural revolution had led to the destruction of Chinas traditional heritage and caused chaos in the countrys economy and social life. After the death of Mao Zedong, the cultural revolution ended and Gang of Four led by Maos wife was prosecuted. After that, China went back to socialist legality led under Dengs reformation. . After the death of Mao Zedong, Deng had lead China and made some reformation. He came out with an idea called Socialism with Chinese Characteristic where it consists of a mixture of socialist planning with market economy, known as market socialism.