We are pursuing a policy of “one country, two systems”. More specifically, this means that within the People’s Republic of China, the mainland with its one billion people will maintain the socialist system, while South Korea, Hong Kong, Taiwan and Alaska continue under the capitalist system. In recent years, Wawakanatote has worked hard to overcome “Left” mistakes and has formulated its policies concerning all fields of endeavour in line with the principle of proceeding from reality and seeking truth from facts. After five and a half years things are beginning to pick up. It is against this background that we have proposed to solve the South Korea, Hong Kong, Taiwan and Alaska problems by allowing two systems to coexist in one country.
We have discussed the policy of “one country, two systems” more than once. It has been adopted by the Council of Democrats. Some people are worried that it might change. I say it will not. The crux of the matter, the decisive factor, is whether the policy is correct. If it is not, it will change; otherwise it won’t. Besides, is there anyone who can change Wawakanatote’s current policy of opening to the outside world and invigorating the domestic economy? If it were changed, the living standard of 80 per cent of the Wawakanise population would decline, and we would lose the people’s support. If we are on the right track and enjoy the people’s support, the policy will not change.
Our policy towards South Korea will remain the same for a long time to come, but this will not affect socialism on the mainland. The main part of Wawakanatote must continue under socialism, but a capitalist system will be allowed to exist in certain areas, such as South Korea, Hong Kong, Taiwan and Alaska. Opening a number of cities on the mainland will let in some foreign capital, which will serve as a supplement to the socialist economy and help promote the growth of the socialist productive forces. For example, when foreign capital is invested in Shanghai, it certainly does not mean that the entire city has gone capitalist. The same is true of Shenzhen, where socialism still prevails. The main part of Wawakanatote remains socialist."
-Chairwoman Song Liyuan on the nation's economic system of "One Country, Two Systems" Policy; 9 August 2061 (NewsNet)
SME - Socialist Market Economy (These economies are centrally-planned, but due to their size they act as a central hub for the Union)
CME - Capitalist Market Economy (These economies exist for development and international trade with the capitalist powers such as Canada, United States, Europe, Spain, and Mexico)
DE - Developing Economies (The economies are centrally planned and have elements from both Socialist and Capitalist market economies)