(excerpts from Reuters report)

China's Communist Party must stay firmly in charge as the nation embraces economic and social change, President Hu Jintao said on Monday in an agenda-setting speech.

In a "state of the nation" work report to the 17th Party Congress, Hu said the country he has led for five years would pursue an increasingly open economy and also faced some social fissures and an environment that needs to be improved.

Hu said the country's future was promising. "China is going through a wide-ranging and deep-going transformation. This brings us unprecedented opportunities as well as unprecedented challenges," Hu told 2,200 delegates at the Great Hall of the People.

"We must uphold the Party's role as the core of leadership in directing the overall situation and coordinating the efforts of all quarters."

The five-yearly Congress is a chance for the Party to spell out his broad agenda for the next five years, and to bring fresh recruits into the leadership who will enforce the charted policies.

Hu used his report to paraphrase policies to share prosperity among the general public, and temper breakneck growth at the current stage, in order to make the country richer, stronger and more stable.

As the economy grew, the Party would also allow the country's increasingly diverse citizens to have a bigger say in their own government, he said.

"Citizens' participation in political affairs will expand in an orderly way," Hu said. "Power must be exercised in the sunshine to ensure that it is exercised correctly."

Hu's signature policy -- "scientific outlook of development" that aims to balance growth with environmental sustainability is set to be written into the Party documents.

Hu said China, under some criticism from abroad over its record trade surpluses, must wean the economy off exports and investment to rely more on consumer spending. At the same time, China needed to clamber up the technology ladder.