On November 12, 1961, the Chinese Communist Party (CCP) Central Committee decided to hold a cadre meeting regarding serious problems resulting from the ongoing famine. Liu Shaoqi and Deng Xiaoping presided over the drafting of the meeting report; the meeting officially commenced on January 11, 1962. There were more than 7,000 participants, including leaders at the central, bureau, provincial, prefectural, and county levels. This gave the meeting its name, the "Seven Thousand Cadres Conference".

Liu Shaoqi's report adhered to the principle of "sufficiency in discussing results, transparency in discussing shortcomings"; the report suggested that the CCP Central Committee should bear the brunt of responsibility in doing self-criticism. Deng Xiaoping was not as straightforward as Liu Shaoqi, stating: "In general, Chairman Mao's many reflections on our discussions regarding the fundamental path and policies have been correct; but we have some number of specific policy measures that are correspondingly contrary to the guiding ideology." Deng also emphasized that to take Mao's quotations during this period as the guiding ideology of the party's general path and for setting various specific policies was correct.

After the meeting started, the participants debated Liu's report fiercely. Mao proposed setting up a new report drafting committee. On January 18, Peng Zhen, then a member of the CCP Central Committee Politburo, made a speech at the drafting committee: "If our mistakes are, first and foremost, the responsibility of the CCP Central Committee Secretariat, then does that include the Chairman, Shaoqi, and comrades on the CCP Central Committee Standing Committee? Whatever needs to be included, include it; however many mistakes there have been, that's how many there have been. It's not as if Chairman Mao is completely without fault… There exists at present a tendency within the Party to not dare to raise opinions, nor to review mistakes. Once reviewed, they get put on the back burner. If Chairman Mao makes one mistake in a hundred, even one mistake in a thousand, yet we fail to review those mistakes, that will have a negative impact on the Party." Zhou Enlai, then premier of the State Council, came forward to defend Mao Zedong; Zhou stated that this policy formulation violated Mao Zedong thought, and that each should reflect on their own mistakes, rather than than seeking fault in others. Peng Zhen's remarks caused him trouble later; he was persecuted during the Cultural Revolution.

The revised report was delivered orally on January 27, 1962 by Liu Shaoqi. In it, he stated that the famine was attributed to "thirty percent natural disasters, seventy percent man-made problems" and that the "the Three Red Banners [that is, the general line in socialist construction, the Great Leap Forward, and the people's communes] have yet to pass the test of implementation". This inspired great resentment in Mao Zedong. On January 29, Lin Biao, Vice Chairman of the Central Military Commission and Minister of National Defense, affirmed the Three Red Banners in a very high-profile manner, and argued that the cause of the famine was purely "catastrophic natural disasters". He also pointed out that, even if some mistakes had been made in terms of the specific work, there were by no means any mistakes in terms of the path taken.

According to Yang Jisheng's book "The World Turned Upside Down: A History of the Chinese Cultural Revolution", the army was quite dissatisfied with Liu Shaoqi's rapid rise in power; Lin Biao had thus been sent to vent anger on the army's behalf, for which Mao Zedong was quite grateful. In the end, although there were some criticisms of the Central Committee's work at the Seven Thousand Cadres Conference, two lines of defense were always maintained. One was the complete affirmation of the Three Red Banners. The other line of defense was that the path forged at the Lushan Conference (generally speaking, the supremacy of Mao, his immunity from criticism, and continuing opposition to rightism) could not be reversed.

The Seven Thousand Cadres Conference brought to light differences among top CCP leaders: Liu Shaoqi and Peng Zhen put more emphasis on Mao's culpability; while Lin Biao, Zhou Enlai and others were more willing to absolve him of responsibility. After that, Mao retreated to a secondary leadership position, while Liu, Zhou, and Deng Xiaoping presided over day-to-day matters as front-line leaders. However, the gradually deepening contradictions between these first- and second-line leadership groups would come to a head during the Cultural Revolution.

References: Yang Jisheng, "The World Turned Upside Down: A History of the Chinese Cultural Revolution"; Zhang Suhua, "Where It All Changed: The Entire History of the Seven Thousand Cadres Conference, January 11 to February 7, 1962"; , Chung Yen-lin, "Deng Xiaoping and the Seven Thousand Cadres Conference"