China's President Xi Jinping (L) and China's Premier Li Keqiang arrive for the third plenary session of the National People's Congress (NPC), in Beijing, China, March 13, 2016.

A closed-door meeting in a resort town on the Bohai Sea may be where China's future leadership begins to take shape, at a time when observers say there's tension at the top in Beijing.

President Xi Jinping is said to be hosting the very highest echelon of China's Communist Party this week in Beidaihe. No hard decisions on leadership are expected to come immediately from the annual meeting, but this year's conclave is expected to initiate those conversations among top officials.

The precise whereabouts of the meeting are not disclosed, but sources close to CNBC said the annual meeting typically takes places in four to five villas nestled in Beidaihe, a coastal town.

The Chinese Ministry of Foreign Affairs did not respond to a message left by CNBC.



Beijing watchers will closely monitor comments that trickle out over time after the meeting this year to discern what may have been discussed there. Xi is closing in on the last year of a five-year term that ends in October 2017. It's for that reason that experts say politics and leadership changes will likely be on the agenda.

The conclave also comes as rumors suggest rising tensions between President Xi and Premier Li Keqiang. If the president's role in China can be thought of as a sort of chief executive officer, then the premier is more like a chief operating officer, tasked with implementing specific policies and overseeing the government.

"We will be looking for signs that the successors to Xi and Li have been chosen, as this time 10 years ago it was clear that Xi and Li would come to power after five years," said Duncan Wrigley, head of China research at NSBO.