Party will discuss changing face of China
The three-day meeting, held behind the closed doors of a luxury Beijing hotel, is the last plenum of its kind before a congress next year at which five of the seven members of the all-powerful Politburo Standing Committee are set to retire.
Those set to stand down include President Jiang Zemin, Prime Minister Zhu Rongji, and Li Peng, chairman of the parliament.
President Jiang is also expected to lobby the plenum for support for his proposals to allow entrepreneurs to join the party.
Place in history
Analysts say his embrace of capitalists is intended to secure the long-term future of the party by attracting the private-sector elite who are likely to play an ever greater role in modernising Chinese society.
If he can persuade the party to adopt his radical plan - the Three Represents theory - he may be considered as great a political thinker as predecessors Deng Xiaoping or even Mao Zedong.
But the move has infuriated the conservative old guard, who believe it is a betrayal of the party as an organisation of workers and peasants.
Rivals
The fate of two men with ambitions for power may be also decided.
Hu Jintao, 58, is vice president and widely believed to have been selected to succeed President Jiang by the late paramount leader Deng Xiaoping.
However, President Jiang has been backing the ambitions of 62-year-old Zeng Qinghong, the head of the pary's influential organisational department.
The key target for President Jiang is to promote Mr Zeng to the Politburo Standing Committee next year - he failed to do so last year.
Analysts say the president himself is unlikely to relinquish all the levers of power on his retirement.
Most think he will retain the chairmanship of the Central Military Commission, although he could even give up that post if he is able to plant enough of his supporters in top positions and so retain power through their influence.