Many investors are sitting on cash as they wait to see which way the markets will turn next year.

'If people don't like the valuation, they just shouldn't buy. Nothing is cheap,' Ophelia Tong, investment director at HT Capital Management, says.

So where should investors look for inflationary protection, while still profiting from the mainland's growth story?

Investment pros all have their own ideas about where money will grow the fastest, longest and safest, but they tend to agree on one thing: go domestic.

The mainland economy has been growing at a double-digit pace, but much of that has been driven by exports. With American import demand beginning to wane and the mainland's middle class gaining more purchasing power, shares that will benefit from domestic growth are the best bet for next year. Add the possibility of a stronger yuan to give Chinese consumers more buying clout, and your best investment target becomes the ordinary man on the street.

'There's only so much the government can do with requiring higher reserve ratios,' Geoff Lewis, head of investment services at JF Asset Management, says. 'Eventually China will have to let the renminbi appreciate a bit faster, and that will be good for consumer plays.'

Few shares have escaped the fervour of mainland-hungry investors, and buying anything will mean accepting high valuations, but with the higher-quality consumer plays, such as Parkson Retail Group, earnings may grow fast enough to keep valuations within reason. 'These consumer firms have been delivering on their earnings,' Mr Lewis says. 'They are growing their earnings by 25 to 30 per cent, and as long as that continues to be the case we don't see it particularly as being a bubble.'

Lower-priced, overseas-listed consumer plays may also be available in Singapore and New York, although by doing so the investor may sacrifice some liquidity, he says.

Companies that will benefit from long-term growth on the mainland, such as expressways, can be a good investment when the shorter-term outlook is less clear.

'The infrastructure companies are not cheap at all, and expressways are a little less affected by government policy,' says Violet Chong, senior portfolio manager at Pacific Capital Management, who says she is holding a 'high level' of cash.

Expressway construction isn't isolated from inflation - cement costs are up 16 per cent in the past year - but is less affected by rising labour costs than manufacturing. And they are less affected by economic cycles, says Ms Chong, who suggests investing in Shenzhen Expressway Co.

Much has been made of the commodity boom and China's central role in it. While mainland energy, metal, food and other commodity companies are sure to grow in the coming years, their share prices generally already reflect that optimism.

Ms Chong cautions that buying into the growing mainland shipping industry may be poorly timed even though prices have declined lately.

'Particularly with the container lines, I'd be concerned that potential trade [out of China] will slow,' she says. 'And the shipyards are deep cyclicals, which means if they go down they go down for a long time. Even if they can maintain earnings for 2008, just the fear of this cyclical downturn means the risk appetite is changed for these companies.'

Ms Chong says the medical sector shows some promise as the mainland restructures its health care sector, although Shandong Weigao is one of the few firms listed here.

'But these companies are not cheap, and we don't know much about their distribution channels or product development, so it's a sector worth being cautious with,' she says.

Telecommunication could be another sector that will benefit from restructuring.

Good deals on mainland real estate are increasingly rare and the sector is also vulnerable to the banking sector, which is on shaky footing due to the credit crisis and repeated attempts to slow lending activity. However, some advisers say given a huge pent-up demand and the rapid sophistication of the market, property promises to deliver good returns even at current valuations.

'With the country growing the way it is, property in China is still a good place to be on the long term,' Ms Tong says.