For most of December, corporate Shanghai and industrial Guangzhou partied hard. Company owners and bosses laid out lavish dinners and karaoke entertainment for their employees..

In dataspeak, manufacturing in China rose at its fastest in 18 months, retail sales were up 15.8 per cent, while the Shanghai Composite Index reached a crescendo on December 31, gaining a whopping 80 per cent for the whole of 2009.

Hong Kong's Hang Seng Index rode piggyback on its mainland cousin, its 52 per cent climb this year, the steepest since 1999.

In complete contrast to last year, the China markets ushered in 2010 with robust confidence — but one hand firmly held by Beijing. This year too, market and industry will be guided by the government's massive and minutely synchronised monetary and fiscal stimulus policies.

The buzzword this year is domestic consumption with hefty incentives and rebates in the pipeline. Bank lending will continue to be generous, tempered only to arrest speculation and ‘bubbles'.

From good old-fashioned electrical appliance manufacturers to new-fangled gaming start-ups, no business has been left to the vagaries of the market. Beijing is laying out the works — incentives, export rebates and tax cuts — to boost enterprises.

In the first quarter, home appliance company stocks will see a higher pitch as manufacturing quickens for the Chinese New Year in February. Subsidies for purchases of appliances such as refrigerators and washing machines in rural China will be expanded and tax rebates for exporters will continue. Suning Appliance, China's biggest electronics retailer by market value, has already risen on these assurances.

The automobile sector is expected to be a major gainer in China. Last year was a watershed period in the country's auto history.

China became the world's largest auto market with car sales surging more than 40 per cent, thanks to government incentives like a substantial reduction in sales tax. The incentives are expected to lift sales by 20 per cent in 2010.

Geely Automobile Holdings has surged more than six-fold following its bid for Volvo, while Beijing Automotive Industry, which is buying technology from GM's Saab unit, says its net income for the year has tripled. The trend will continue.

A surprise winner on the bourses may be the Chinese airlines companies. China Eastern Airlines gained 5.9 per cent last week as regulators approved its proposed takeover of Shanghai Airlines.

The merger will make it the nation's second-biggest carrier. Air China also jumped 9.8 per cent as it completed the purchase of HK$6.3 billion (Dh2.98 billion) worth of shares in Cathay Pacific.

The sunrise industry of alternative energy will shine on the Shanghai and Hong Kong exchanges. China is set to become the world's third-biggest producer of electricity from wind by year-end.

China Longyuan Power Group, the nation's biggest wind power producer, may spend about 18 billion yuan a year to add at least 2,000 megawatts of capacity annually within the next few years.

The government is offering tax breaks to set up a new national renewable energy development fund and issue preferential loans to the sector. It will also compel grid operators to buy power generated from renewable energy sources including solar, wind and geothermal. Brokerage firms in Shanghai and Hong Kong say that the outlook for the industry is "very, very bright".

Telecom stocks will also be on sure pitch this year. The trend has been set by companies such as Datang Telecom Technology which went up 172 per cent in 2009. Datang is a major developer of China's home-grown 3G standard.

Since the government began issuing 3G licences to telecom operators early this year, investor interest in Datang Telecom Group has been on the rise. Its TD-SCDMA technology has been adopted by China Mobile, the country's largest cell-phone operator.

The going will be good for Chinese Internet firms too, which raised $1.5 billion in 2009 and are banking on strong foreign interest to grow. Tencent Holdings, China's largest Internet company, NetEase.com the third-largest online games operator and Chinese software developer Kingsoft have prospered despite the downturn.

Surprisingly, it's the booming property sector that will have a roller coaster ride on the bourses. For Beijing, it is the property ‘brat' which needs to be tamed.

 

Suranjana Roy Bhattacharya is a freelance journalist.