The Year of the Dragon is upon us - appropriately enough, as this is the most powerful sign of the Chinese zodiac. These days, it can seem as if China is taking over the world, its economy in overdrive. This energy and optimism is nowhere better expressed than in the capital, Beijing, a full-on, frenetic sort of place with a dizzying mixture of history, urban regeneration (for better or worse) and retail-therapy opportunities.

The following guide assumes that you have already explored the obligatory tourist sites. You have spent two days doing Tiananmen Square, the Forbidden City and the Temple of Heaven and taken an excursion to the Great Wall.

Now is the time to enjoy some downtime in Beijing, shopping and strolling through one of the world's great metropolises. Here's a suggested itinerary for a full, but relaxing, day in and around the city centre.

Start at Beijing Planning Exhibition Hall

It's back to Tiananmen Square, I'm afraid, but this time we are making for a little-visited museum near the south-east corner of the square with an offputtingly boring name and a fascinating exhibit that will help orientate you for the day ahead.

This is a model of Beijing as it will look in 2020, once the "Beijing Master Plan" has been completed. On a scale of 1:750, the model occupies more than 280m² and is bathed in coloured lights, as if you are seeing the city from an aircraft at different times of day.

20 Qianmen Dong Dajie. Open Tues-Sun, 9am-4pm, admission 30 yuan (about $5).

Take a short stroll to Qianmen Dajie

See what controversial changes the "Master Plan" has already wrought on one of the oldest shopping streets in China. Now pedestrianised, the old route from the Forbidden City to the Temple of Heaven is where ordinary folk shopped for food, clothes and snacks. Then, in the run-up to the 2008 Olympics, the neighbourhood received a "facelift".

Old buildings were replaced by new and most of the traditional businesses were driven out by the usual suspects: Starbucks, Rolex and McDonald's.

But vestiges of old Beijing remain, especially on Dashalan side street. There the Tongrentang herbal drugstore, Rui Fu Xiang silk store and the heady scents of the traditional tea shop (where leaves are gathered in metal scoops, weighed and poured into golden paper packets) are all redolent of Imperial China.

Hop in a taxi to Hongqiao Market

Also known as the Pearl Market, though it sells much else besides, this is a flea market reinvented as a department store, where tourists clean up on pearls, clothes, handbags and silk. The hassle factor is high, but there are real bargains if you haggle hard.

The more up-market top floor is dedicated to pearls and antiques - some of the latter, amazingly, may even be genuine - and not so susceptible to bargaining. Watches and electronic goods are best avoided. Expect to pay up to $47 for a string of freshwater pearls, $63 for a fake designer handbag. The excellent Toy Market is next door.

Hongqiao Market, 46 Tiantan Donglu, Chongwen District, open 8.30am-7pm.

Time for lunch ...

Next, head east to Chaoyang District, to the ritzy Central Business District and a fine restaurant specialising in Beijing cuisine, Xiao Wang's Home Restaurant. If the weather's good, eat on the terrace, where trendy young women with thin legs and thin cigars knock back large beers. The Peking duck and deep-fried spare ribs are recommended.

Xiao Wang's Home Restaurant, No 2 Building, Guanghua Dongli, Chaoyang.

... Followed by more shopping

A 10-minute walk from the restaurant, just off the main thoroughfare of Jianguomenwai Dajie, is Beijing's other multi-storey flea market, the Silk Market. There are thousands of stalls and the sales pitches are even more aggressive than in the Pearl Market.

Silk Market, Xiushui Dong Jie, Chaoyang District, 9.30am-9pm.

What about the hutongs?

The truth is, many of these old alleyways, with warrens of one-storey courtyard houses to either side, have already been sacrificed to the "Master Plan". One of the largest-surviving concentrations lies in the Houhai area, a taxi ride away.

Probably the hippest street in Beijing is Nanluogo Xiang, in the heart of a heritage zone that claims to be "the only remaining traditional residential area in China".

The street itself is a trendy strip of bars and shops selling tapas and churros, handmade notebooks and "thousand-layer cotton shoes".

The hutong dwellings were home to royals, high-ranking officials and rich merchants. To see an interior, visit the home of the revolutionary novelist Mao Dun (1896-1981) at 13 Houyuan'ensi Hutong.

Night Market and Snack Street

As the light fades, head back to the centre for Beijing's most irresistible attraction: Donghuamen Night Market, immediately to the east of the Forbidden City. This "pavement skewer eatery", which dates from 1984, claims to sell 60 snacks from around China, but it is just an excuse to gross out squeamish Westerners. Dishes include fried silkworms and centipedes, vile-smelling sea horses and "sheep penis".

At its eastern end, the market runs into Wangfujing Dajie, Beijing's equivalent of Oxford Street. Wangfujing has its own night market, where locals and tourists throng to feast on bugs, including live beetles wriggling on skewers.

Street-wise

This itinerary can be done independently, by hiring taxis as you go, or you can hire one taxi for the whole day (about $47). A better option, less open to misunderstandings and scams, is to hire a vehicle and driver for the day through a travel agency, with pre-agreed itinerary. © Nigel Richardson