It began with allowing people to be self-employed business owners. Once a self-employed business reached a bigger scale, hiring employees was allowed. Back then, the phrase "hiring employees" in Communist doctrine meant exploitation. Our Party leaders at the time were quite wise, they didn't use the phrase "hiring employees." They used other phrases instead,  for example: "ask for helpers," or "train apprentices." One could ask for one or two helpers, or train three to five apprentices. The total number should not exceed seven. What happens when there are more than seven? In that situation, for example, in Wuhu, Nian Guangjiu, who sells sunflower seeds, hired more than 100 employees. Local authorities arrested him. When Deng Xiaoping learned about this, he said: "We can't have him arrested. The impact would be too big. Let's wait and see." So from 1982 to 1987, the self-employed business model experiment had been observed for 5 years.

During this five years, self-employed business boomed in urban areas, so did private business. This is the situation in urban area. In rural area, since 1979, peasants started to think creatively by themselves. The People's commune system was holding back every peasant's productivity. That is why with the same labor and land condition, the People's commune system could not make crops grow in the fields. So the development of agriculture was very slow. People were starving in a lot of places. At this point, a peasant in Xiaogang Village of Fengyang County, Anhui Province, secretly organized “household responsibility system." 18 families secretly agreed to allocate the land and each take individual responsibility to cultivate. After this had been established, just the second year, the local Grain Administration became rich because villagers began paying agriculture tax. Before that, every year the villagers had to go out of town to beg for food. Wan Li, then Party Secretary of Anhui province, firmly supported the peasants when he learned about the experiment. So did Deng Xiaoping. So this is when reforms in rural area began, with a change from the People's commune system to the household responsibility system. Later, Zhao Ziyang, introduced this practice to Sichuan province, gradually and naturally dismantled the People's commune system.