During the 90-minute speech, outgoing President Hu Jintao stressed the need for reforms, a broad-based approach towards democracy and the challenges and risks the nation faces on the path of development.
He cited the widening divide among the rich and the poor, the imbalances among the burgeoning cities and the struggling countryside. Hu also stressed the need to curb personal greed and called for better discipline.
"Nobody is above the law," said Hu during in an apparent reference to the recent corruption scandals involving the top leaders of the party.
"If we fail to handle this issue well, it could prove fatal to the party, and even cause the collapse of the party and the fall of the state."
Seven of the present nine-member standing committee of the politburo are expected to step down leaving Vice President Xi Jinping and Vice Premier Li Keqiang who are slated to become the party chief and deputy chief. Xi will take over as the party chief replacing President Hu and will take over as the president of the nation at the annual meeting of parliament in March 2013. Li is expected to become the premier replacing the current prime minister Wen Jiabao.
Security has been tightened in and around Beijing, especially at the Great Hall of the People where the week-long gathering is taking place and in nearby Tiananmen Square, the scene of the 1989 pro-democracy protests.
At the Great Hall, delegates observed a moment's silence to remember Mao Zedong and other revolutionary leaders after the national anthem. A golden hammer and sickle adorned the wall as the leaders began the party gathering that takes place every five years.
Scroll through the pictures to have a glimpse of the 18th National Congress of the Communist Party of China: