Mao wrote On New Democracy in early 1940[1]: 36 while the Yan'an Soviet was developing and expanding during the Second Sino-Japanese War.
[2]: 61–62 Mao later expanded on the principles discussed in On New Democracy in his April 1945 report On the Coalition Government, delivered during the Seventh Congress of the Chinese Communist Party.
[3]: 29 These principles were then reflected in the Party's political views from 1949 to 1952, pursuant to which it was assumed that the initial new democracy would take ten years or more to transition to a socialist society.
[3]: 86 Later, the Soviet model became increasingly adopted by the Chinese Communist Party (CCP), and some of the ideas discussed in On New Democracy and On the Coalition Government were discarded.
"[1]: 36 Furthermore:[1]: 36 in the new democratic republic under the leadership of the proletariat, the state enterprises will be socialist and will constitute the leading force in the whole national economy ... China's economy must develop along the path of the 'regulation of capital' and 'equalization of landownership' and must never be 'privately owned by the few' ... We must never establish a capitalist society of the European-American type or allow the old semi-feudal society to survive.In this framework, the private sector could not "dominate the livelihoods of the people," but the private sector need not be abolished.