The controversy on the convergence of socialism and capitalism has recently been focused on China. In this paper, an industrial organisation framework is used to portray the key features of "Socialism with Chinese Characteristics." The structure of supply and demand and the process of price formation is analysed to explicate the ramifications of the Chinese reform process, and the changing patterns of both government intervention and market forces in the Chinese food economy. An examination of this fusion reveals a number of implications for the world food economy and international socialism.