After the last two decades of reform and opening-up and continuous industrial restructuring, six pillar industries including electronics and telecom, information and home appliances, chemical engineering and rubber, beverage and food, automobile and shipbuilding, garment and ornaments have taken shape in Qingdao. According to preliminary statistics, the city's GDP in 2004 was 216.38 billion yuan, increasing by 16.8 percent over the previous year, the fastest growth rate since 1994. Among the above-mentioned increase , primary industry accounted for 16.18 billion yuan, secondary industry 117.14 billion yuan , and tertiary industry 83.06 billion yuan, an increase of 2.7 percent, 21.1 percent and 14.2 percent respectively. The proportion of the three industries was at 7.5:54.1:38.4. This ranked the city at the 11th in comprehensive economic strength, and 5th in the 15 vice-provincial-level cities in the country.

    In 2004, Qingdao accomplished 13.051 billion yuan of local financial revenue in the general budget, and 16.406 billion yuan of local financial expenditure in the general budget, up 28.5 percent and 16.9 percent respectively over the previous year.

    The urban and rural residents' income grew steadily and the trading of commodities in both urban and rural areas was flourishing. In 2004, the total retail sales of consumer goods surpassed 60 billion yuan , reaching 60.55 billion yuan, an increase of 15.8 percent over the previous year.

    In 2004, Qingdao's export and import value (including central and provincial government-owned companies) totaled US$ 26.988 billion, of which export was US$ 15.782 billion and import was US$ 11.206 billion, an increase of 30.6 percent, 27.4 percent and 35.6 percent respectively over the previous year.

    A total of 2,423 foreign-invested projects were approved in 2004, with a total contracted foreign investment of US$ 6.766 billion and an actually utilized foreign investment of US$ 3.817 billion, increasing by 7.8 percent, 27.2 percent and 33.1 percent respectively over the previous year.

    Qingdao has established trade relations with 192 countries and regions. By the end of 2004, a total of 76 international Fortune 500 companies had established 132 projects in Qingdao.

    Qingdao is rich in agricultural resources: grains, edible oil, timber, fruits, livestock and marine products, in particular. Dazeshan grapes, grown in Pingdu, are well-known worldwide. There are a great many bays and coves along the coastline of Qingdao, with a large area of shallows ideal for aquaculture. Common aquatic  products found and harvested in Qingdao include porgies, yellow croaker, common perch, abalone, oysters, prawns, scallops, sea cucumber, crabs and top shells.

    Agricultural output in 2004:

    Agricultural production: 2,323,400 tons

including,  Wheat:

    974,200 tons

    Corn:  1,202,100 tons

    Peanuts:  580,300 tons

    Vegetables:  6,720,900 tons

    Fruits:  748,500 tons

    Meat:  755,600 tons

    including , Pork:  266,100 tons

    Fowl:  407,400 tons

    Cow and goat milk:  479,500 tons

    Eggs: 379,600 tons

    As one of China's top ten economically dynamic cities, Qingdao has an excellent environment for investment and living with fair markets, sound public security, comfortable living conditions, efficient government work, perfect infrastructure facilities and guaranteed personal and property safety measures. Thanks to all these advantages, Qingdao won the "Entrepreneur's Satisfaction Award".

    Many famous Chinese enterprises are located in Qingdao, such as Haier Group, Hisense Group, Qingdao Iron and Steel Group, Tsingtao Brewery Co., Ltd, Aucma Group, Etsong Group, Double Star Group, Guangyuanfa Group, Liqun Group, Qingdao Port (Group), Qingdao Construction Group and Shandong Cherry Group. Tsingtao Beer is a century-old beer maker while Haier is a new emerging star since China's reform and opening-up. Haier's global sales income in 2004 surpassed 101.6 billion yuan. Hisense, Double Star and Aucma are all well-known Chinese brand names.

    Nationally, Qingdao is home to 31 famous brands and 10 well-known trademarks. Four companies have won national Quality Control Awards, and 12 companies have entered the nation's Top 500. In addition, 189 local brands have won recognition at a city or provincial level.

    Qingdao's financial sector is expanding rapidly. At the end of 2004, there were 16 Chinese banks with 1,481 branches and savings outlets, eight foreign banks with five branches and three offices, together with one assets management  company, one trust investment company and one financial management company in the city, with over 20,000 financial staff workers. The balance of domestic and foreign currency deposits grew from 203.99 billion yuan at the beginning of the year to 239.01 billion yuan and the balance of domestic and foreign currency loans grew from the initial 172.17 billion yuan to 201.17 billion yuan.

    In Qingdao, there is one securities corporation, 39 business offices on securities and three on securities services. There are three companies on futures broking and four business offices on futures broking. Nine companies are listed domestically (having issued 10 stocks) and one listed overseas. The capital raised by the nine listed companies totals 10.77 billion yuan and the trade volume of stocks and funds hits 67 billion yuan, an increase of 35 percent over the previous year.

    There are 16 insurance companies in Qingdao with 69 branches (offices) and 43 service outlets; two insurance brokers, 29 insurance agencies, five insurance appraisal companies, and three representative offices of foreign insurance companies. In 2004, annual insurance coverage amounted to 730.39 billion yuan and annual premium income totaled 4.76 billion yuan , an increase of 17.28 percent and 1.8 percent respectively over the previous year.

    Qingdao has 25 research institutes and higher educational institutions as well as managerial institutions. Qingdao's Ocean University of China is a key national university. More than half of China's marine professionals and researchers, including 40 academicians of the Chinese Academy of Sciences and the Chinese Academy of Engineering, are working in Qingdao. Qingdao is an important city for marine research, international academic exchanges and professional training.

    Qingdao has made great achievements in the fields of investment promotion and introduction of talents. The local businesses like Haier, Hisense, MESNEC and Tianren have set good examples in this regard. In the past three years, Qingdao has seen more than 470 foreign experts employed for a total of 257 technical and managerial projects in the city, as well as over 1,500 person-time of overseas technical training for Chinese personnel. These projects helped to solve over 290 technical and managerial problems and received over  5 million yuan in financial support from the State and the provincial government. In 2004, a total of 37 projects concerning bringing in foreign technicians and managers were approved by the State, obtaining 500,000 yuan of special financial support, an increase of 43 percent over the previous year. Four key talent importation projects were approved by the State, and such projects received specially allocated funds totaling 600,000 yuan , 150% increase over the previous year. Qingdao MESNAC Co., Ltd was also approved as a national monstration base for bringing in talented personnel.

    The Municipal Government has successfully organized special business talks on the importation of international talents to Qingdao for three consecutive years, attracting altogether 806 overseas Chinese students (33 percent being doctorate holders) and nearly 100 foreign experts from 29 countries participated in. A total of 989 letters of cooperative intent were agreed upon and 115 agreements for technology transfer and joint development were signed, among which 13 were investment-related projects, and the total foreign investment reached US$ 82.1 million. A total of 87 letters of intent on the engagement of technical consultants, overseas representatives and guest professors were reached between overseas Chinese students and Qingdao businesses. Of these, 57 engagement agreements were formally signe. In addition, over 400 employment and investment intentions were agreed upon between overseas students and businesses.

    State-level Key Development Zones

    - Qingdao Economic and Technological Development Zone

    Qingdao Economic and Technological Development Zone (QETDZ) is one of the State-level economic and technological development zones approved by the State Council. It is situated on the west coast of the Jiaozhou Bay, which is connected to the Bohai Sea Economic Belt. It is in the central area of the "Great Qingdao" strategy with huge development potential.

    The planning and construction of the QETDZ has been in accordance with international standards. So far, a total of  20 billion yuan has been injected into the construction of infrastructure facilities in the zone. Qianwan Port is a hundred-million-ton-level international port inside the QETDZ, with the largest modern container deep-water dock in China and over 100 shipping routes linking all parts of the world.

    Importance is attached to the construction of a beautiful environment in the QETDZ. Now the greening coverage rate in the zone is 44 percent and the per capita public green area is 32 square meters. It has won such honors as "China Human Settlements and Environment Award" and "National Model for ISO14000 Acquisition".

    The excellent investment environment has attracted a large number of domestic and foreign investors to the zone. So far, QETDZ has seen a total investment of more than US$ 9 billion from more than 50 different countries and regions as well as over 20 Chinese provinces. Of these, over 40 projects have been set up by the international Fortune 500 from over 30 countries and regions.

    Centering on the construction of a new industrial center of Qingdao, QETDZ lays emphasis on the establishment of such six industrial clusters as home appliances and electronics, petrochemicals, machinery manufacture, new materials, warehousing and logistics, and high and new technology. The main economic indices of the zone have been growing at an annual growth rate of 30 percent. According to a recent comprehensive evaluation on investment environment conducted by the Ministry of Commerce for 54 State-level development zones, QETDZ ranked  the fourth in overall index, the first in social and environment index, and the third in human resources, supply level and technical innovation milieu index.

    QETDZ is a tourist resort with pleasant climate and picturesque scenery. A large number of tourists are attracted to the zone by the beautiful beachscape and landscape. Xuejiadao Island is a provincial-level scenic spot with charming coastal view, such as the Golden Beach, the Silvery Beach, the Liansandao Isle Zhuchadao Isle. A comprehensive tourism development program featuring the film and television industry is now under way.

    - Qingdao Free Trade Zone

    Established on November 19, 1992 with the approval of the State Council, the Qingdao Free Trade Zone started normal operation on March 29, 1993. It is the only one of its kind in the Yellow River region. A series of preferential policies have been practiced in the zone including tax exemption and bonded warehousing. Businesses in the QFTZ range from international logistics, global procurement, international exhibitions and international trade, to export processing as well as bonded warehousing.

    Since 2000, emphasis has been laid on mechanism innovation, people-oriented management and better service with minimum government interference in order to improve the investment environment of the QFTZ, making the zone into a "zero fee investment zone" and a "charge-free full-course agency service zone". QFTZ is the first of the 15 free trade zones in China to win ISO9001 and ISO14001 certification. With the increase of economic power, QFTZ has taken a dramatic leap from the bottom to the top. In 2004, the per square kilometer GDP of the QFTZ exceeded 1.2 billion yuan, the import and export value reached US$ 490 million, the tax revenue hit 480 million yuan, and the local financial revenue met 140 million yuan. The QFTZ has a total of over 10,000 employees. It ranks first in Shandong Province in terms of the output/unit area, and leads other free trade zones in the country. By the end of 2004, a total of 22 projects invested by the interantional Fortune 500 had settled in the zone.

    On August 16, 2004, the State Council designated the QFTZ as a pilot zone for exercising a "Linkage Mechanism between the Zone and the Port", which gave the zone impetus for exponential development. In the future, QFTZ will focus on such sectors as international logistics, export processing and international exhibition in order to build QFTZ into an international free trade center in the Yellow Sea region with developed logistics and exhibition facilities as well as high-tech industries.

    - Qingdao High-tech Industrial Development Zone

    Qingdao High-tech Industrial Development Zone was founded in May 1992 with the approval of the State Council. In November of the same year, the State Council named QHIDZ the "National High-tech Industrial Zone". In 2000, it developed into an export-oriented base for high-tech products. In 2001, it was named the "Exemplary State-level High-tech Industrial Zone". In 2002, it was designated as a software industrial base under the national "Torch Program" and the "National University Science and Technology Park". In 2003, it received the titles of the "High-tech Industrial Development Exemplary Zone" and the "Model Software Industrial Base" under the national ?Torch Program'" from the Ministry of Science and Technology. The business service center of the zone was named the "State-level Business Service Center", and the software park was named the "National 863 Program Software Incubator". According to the latest rankings for national high-tech zones issued by the MOST, QHIDZ ranks third in overall technological innovation and second in growth rate.

    In accordance with the principle of "differentiated competition and differentiated development", QHIDZ has decided to concentrate on the four industrial areas of electronics and telecom, marine bio-pharmacy, software and new materials for specialized and large-scale development. So far, many backbone enterprises such as Haier, Lucent, Brown & Sharpe Qianshao, Tsinghua Unisplendour, Neusoft Shandong, Ericsson Langchao, Jiante Biological, Auhai Biotech, Yellow Sea Pharmaceuticals, Qingdao Magtech and DIC LCD have established businesses in the zone.

    QHIDZ attaches importance to the development of international business relations and the improvement of the investment environment in the zone. So far, it has established good cooperative relations with the U.S., Japan,  Republic of Korea (ROK) and other countries and regions, and constructed five comprehensive or specialized incubators in the zone, including a business development plaza, a technological development park, a business development park for returned overseas students, an academy of life science and a software park. These incubators, with a total floor space of over 100,000 square meters, form a complete business development system.

    - Qingdao Export Processing Zone

    Qingdao Export Processing Zone (QEPZ) was formally approved by the State Council in March 2003. In December of the same year, it passed joint evaluation and auditing conducted by eight ministries and commissions including the General Administration of Customs. The total planned area of the zone is 2.8 square kilometers and the planned area of the first phase is 1.7  square kilometers, which includes a processing zone, a warehousing zone, an administration zone and a customs supervision zone.

    QEPZ is located in Chengyang District of Qingdao, enjoying convenient transportation. It is 36 kilometers from the Qianwan Port, 33 kilometers from the Qingdao Port and 19 kilometers from the Qingdao Liuting International Airport. QEPZ is close to the 308 National Highway, the Jinan-Qingdao Expressway, and the Yantai-Qingdao Highway via the Jiaozhou Bay Expressway and the Liuting Flyover. Since QEPZ is within the range of 50 kilometers from the seaport, container transport is economical and export-oriented business is convenient.

    QEPZ aims at developing into a top-class export-processing zone in China and the construction in QEPZ was pushed forward at high standard, high efficiency and high quality. In 2004, the total investment in the QEPZ reached 190 million yuan. Completed projects of the first phase include the Nanhai Road, the Qianhai Er Road, the Chenggang Road, a 10,000 square meters of apartments for staff workers, a 100,000 square meters of workshops and six intelligent information management systems (electronic toll gate, automatic vehicle identification, container number identification & tracking, closed-circuit TV monitoring, alarming and electronic patrol). All the projects have achieved the advanced level in China.

    A brand-new customs clearance mode featuring "one-stop declaration and one-stop inspection" is practiced in the QEPZ, which greatly improves the working efficiency of the customs and caters to the export-oriented enterprises.

    QEPZ has introduced projects concerning precision machinery, electronic information and new materials, which feature large-scale investment, high technological content, complete industrial chain and strong foreign exchange earning power. In the coming three to five years, a layout will take shape, integrating the central zone, the industrial zone, the pilot zone and the residential zone, and the QEPZ will be developed into a top-class zone with ecological environment, large import & export capacity and high technological content. In the coming eight to ten years, the QEPZ and its adjacent regions will be developed into an industrial zone around the Jiaozhou Bay, a processing and manufacturing base on the Shandong Peninsula and a free trade zone for attracting businesses from the rest part of China, Japan and ROK. As a result, a new and, export-oriented industrialized city with complete infrastructure facilities and beautiful eco-system will emerge.

    - Qingdao Cross-Strait Agricultural Co-operation Exemplary Zone

    Located in Pingdu, a county-level satellite city of Qingdao, the Cross-Strait Agricultural Co-operation Exemplary Zone was set up in March 1999 with the approval of the Taiwan Affairs Office of the State Council, the Ministry of Commerce (formerly the Ministry of Foreign Trade and Economic Cooperation) and the Ministry of Agriculture. The zone covers a total area of 3,166 square kilometers. In December 2001, the Qingdao Municipal Government established a 22.4-square-kilometer special farming center in Nancun of Pingdu named "Qingdao High-tech Agriculture Development Zone".

    In order to develop the food processing industry, the Exemplary Zone spares no efforts to introduce technology-backed further processing enterprises for farm and by-products like grains, edible oil, vegetable and livestock products. A farm product processing center has been established in the zone to take in new and high technologies. The zone is divided into three sections: export-oriented foodstuff processing section, comprehensive industrial section and tourism development section. To facilitate businessmen from Taiwan, a special food processing area is set up in the central area of the Exemplary Zone for Taiwan businesses.

    Based on the overall planning and actual development needs, the Qingdao Municipal Government and the local government of Pindu have jointly invested 200 million yuan into the construction of infrastructure facilities, such as roads, water supply and drainage system, power supply, telecom and land leveling. Investors of large projects in the zone, especially large-scaled high-tech projects, will enjoy preferential policies in land use; and all businesses in the zone will enjoy special preference in addition to the State preferential policies for backbone processing enterprises for farm produce.

    So far, more than 120 Taiwan investment enterprises which involve 21 new farming technologies and over 100 improved crop varieties have been established in the zone, with a contracted foreign investment of US$ 216 million and actually utilized capital of US$ 109 million. Many of these businesses have become the pillars of the local economy.

    Qingdao Cross-Strait Agricultural Co-operation Exemplary Zone provides complete infrastructure facilities and excellent services for the investors.

    - Provincial-level Economic and Technological Development Zones

    With the approval of the Shandong Provincial Government, Qingdao has established six provincial-level economic and technological development zones ?the Coastal Economic and Technological Development Zone, the Jimo Economic and Technological Development Zone, the Laixi Economic and Technological Development Zone, the Pingdu Economic and Technological Development Zone, the Jiaonan Economic and Technological Development Zone and the Jiaozhou Economic and Technological Development Zone. All these development zones have complete infrastructure facilities, excellent investment milieu and convenient transportation. More and more foreign business people are attracted to start their businesses here.