Chinese state media on Sunday raised expectations for major reforms at a Communist Party meeting which is setting the course for the world's second largest economy over the next decade.

Leaders on Saturday began a four-day meeting, known as the Third Plenum, to chart the country's future as it faces a series of challenges ranging from environmental degradation to a widening income gap.

In a front-page editorial, party mouthpiece the People's Daily praised past economic reforms for bringing prosperity to the world's most populous country and called for more.

"China needs to deepen reform... opening up on all fronts in order to forge ahead," it said, but added the country faced an "uphill road" as it seeks to address new challenges.

Analysts say China remains committed to economic reform, launched more than three decades ago in the communist country, but the pace slowed under the previous leadership of President Hu Jintao.

The new leaders, President Xi Jinping and Premier Li Keqiang, have in recent days raised expectations for economic reform. But few details have emerged from the secretive meeting which ends Tuesday.

The economy expanded an annual 7.7 percent for all of 2012, the worst performance since 1999.

Although economic growth rebounded to 7.8 percent year-on-year in the third quarter of this year, officials say China must adjust to slower development to carry out structural changes.

"In a society with rapid transformation and accumulating contradictions... every step we take towards the peak is a perilous climb that bears risk and even crisis," the People's Daily said.

Although economic changes are on the agenda for the party meeting, officials and state media say, Western-style political reforms have been ruled out.

But in a rare challenge to the ruling Communist Party, supporters of jailed politician Bo Xilai have established a new political party, one of the founders said Sunday.

Scholar Wang Zheng said the party was set up on Wednesday to support the former high-ranking official who was given a life sentence for corruption in September.

Bo, the former Communist Party chief of the city of Chongqing and a member of the elite politburo, won admirers among the so-called "New Left" for a revival of "red" culture, harking back to the days of leader Mao Zedong.

Chinese authorities view organisations set up without express authorisation as illegal and have cracked down on similar groups in the past.

Analysts have played down the prospect of firm measures emerging from the party meeting, since such gatherings tend to unveil general principles rather than concrete policies.

"Expectations that detailed new policies will be unveiled at the upcoming Third Plenum are likely to be disappointed," research firm Capital Economics said in a recent report.

"But the key gauge of success should instead be whether the leadership presents a coherent and comprehensive plan for economic restructuring."

The People's Daily gave a lengthy list of people's "hopes" for the meeting in a separate article.

Policies could focus on narrowing the wealth gap and shifting rural residents to the cities, it said.

Although decades of rapid economic growth have created new wealth, the gap with rural residents and the urban poor is cause for alarm, analysts say.

Greater urbanisation requires relaxing the "hukou" household registration system which restricts social benefits to a person's original residence, depriving migrant workers of services when they move to find employment.

The People's Daily also dangled the possibility of a "new round" of reforms to powerful state-owned enterprises.

China moved to shut down or merge loss-making state firms in the late 1990s, leaving a smaller number but with immense power over large sectors of the economy.

Analysts say China is unlikely to embark on major reforms or privatisation of state firms, though Beijing is seeking to build up the private sector which could create more competition.