BEIJING - China opens its annual session of parliament Friday with the Communist Party expected to reassure the people it can bridge a widening rich-poor gap and keep the world's third largest economy on track.

The nine-day gathering of the National People's Congress in Beijing's Great Hall of the People kicks off with a "state of the nation" address by Premier Wen Jiabao, who will lay out the government's priorities for the year.

With the world downturn exposing the volatility of export markets, the list this year will be topped by Beijing's efforts to retool the economy in the world's most populous nation, which for decades has relied on cheap exports.

While this pattern has bolstered China's global economic clout, it has led to vast disparities in wealth between regions and created a floating underclass of 230 million poor migrant workers increasingly seen as a stability risk.

Wen's report is expected to give a fresh push to boost domestic economic consumption and offer assurances to those left behind by China's boom, including possible new policies to widen the nation's social security umbrella.

"Last year the focus was on economic growth but this year it's more about ensuring economic benefits are more justly distributed amongst the various classes," said Willy Lam, a China analyst with Chinese University of Hong Kong.

"The leaders are concerned because after 30 years of reform, we are seeing class warfare."

The NPC has no real legislative power but meets to rubber-stamp the decisions of the Communist Party elite in an annual ritual aimed at putting a veneer of democracy on China's rigid top-down political system.

The country's Communist leaders have already made their priorities clear, with Wen warning last week that 2010 would be the "most complicated year".

"We must pay high attention to elements of an excessively large income gap affecting social stability," said Jia Qinglin, head of the Chinese People's Political Consultative Conference, which advises the main legislature.

Asian financial markets are keenly watching the congress for signs of what action the leaders will take to keep China's soaring growth in check, rein in massive lending and prevent the growth of asset bubbles.

Observers will be also watching to see if the next generation of leaders led by Vice President Xi Jinping and Vice Premier Li Keqiang will begin to take a higher profile ahead of their expected ascension to power in 2013.

On the eve of the congress opening, China unveiled the smallest increase in its military budget for at least 10 years amid national belt-tightening, and vowed that its rapid military modernisation posed no threat to other countries.

As is customary during major political events in China, security has been tightened in the capital to prevent disruptions.

Extra police have been deployed and a force of more than 700,000 including civilian volunteers will help keep public order, according to official media reports that dubbed the effort a "great moat" of security around Beijing.

There are up to 3,000 NPC delegates, including many from troubled minority regions like Tibet and Xinjiang in ethnic garb who slap a splash of colour on a gathering otherwise made up of party cadres in dark blue business suits.