Red banners are on display throughout the capital Vientiane, where 576 delegates of the Lao People's Revolutionary Party (LPRP) are gathered until March 21 to choose members of the ruling Politburo, according to state media.

Representing more than 191,700 party members, delegates are to decide who will take the key post of general secretary, currently occupied by 75-year-old Choummaly Sayasone, who is expected to stay in the job.

The congress - described by the Vientiane Times as "the most significant event in the country's political life" - is the traditional venue for the redistribution of powers.

But in a surprise move in December, Prime Minister Bouasone Bouphavanh quit to be replaced by National Assembly president Thongsing Thammavon.

Analysts say his appointment points to a realignment of power in favour of the party's pro-Vietnamese factions and those wary of major Chinese investments pouring into the country.

"Some people saw in this a victory for the pro-Vietnamese over pro-Chinese members," said one foreign observer, who declined to be named.

The reshuffle allowed the party - which has ruled since 1975 - to maintain strong ties with Vietnam's communists, according to Martin Stuart-Fox, a Laos expert at Australia's University of Queensland.

"Political ties between Laos and Vietnam have always been strong, and Thongsing as a good Party man has been closer to Vietnam than Bouasone was," he said.

Both Hanoi and Beijing vie for influence in one of the world's poorest countries, home to about six million people.

China's economic role in Laos has grown considerably in recent years as it eyes the tiny and impoverished nation's natural resources, including rubber, and the geographical access the country offers to Thailand.

Its influence has prompted concern among some party members and Vietnamese who see Laos as an important part of their defence strategy.

"The greater the Chinese presence, the more nervous the Vietnamese become," said Stuart-Fox.

For the past five years, Vietnam has been one the top three foreign investors in Laos, along with China and Thailand. Their investments have outpaced foreign aid, on which the country relied completely until recently.

Congress will also adopt an economic plan for 2011-2015 as the country looks to escape from underdevelopment by 2020, having enjoyed strong annual growth of at least seven percent over the past few years.

"I think it is realistic. Laos is changing very fast," said Leik Boonwaat, acting United Nations resident coordinator.

By Amelie Bottolier-Depois - Agence France Presse - March 17, 2011