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Satellite Cities

* Economy and Development

Qingdao is a key textile, light industry and chemical production center in China. The city has special advantages in household electrical appliances, electronics, rubber, locomotive and rolling stock manufacture, as well as food processing. The city’s GDP in 2002 reached RMB151.82 billion, an increase of 14.6% over the previous year. From this figure, primary industry accounted for RMB14.59 billion, secondary industry accounted for RMB76.50 billion, and tertiary industry accounted for RMB60.73 billion, increases of 4.2%, 16.9% and 14.7% respectively. This placed the city 11th in comprehensive economic strength, and 5th in the 15 vice-provincial-level cities in the country.

Qingdao is endeavoring to build a modern industrial system centered around three economic sectors (port, ocean development and tourism) and four pillar industries (electronics and home appliances; shipbuilding, locomotives, rolling stock and container manufacture; petrochemicals; and new materials).

Qingdao is forming the framework for a greater metropolis incorporating Qingdao, Huangdao and Hongdao. This will involve construction of a coastal road from Mt. Langyatai to Tianheng Island encompassing all the satellite cities.

In 2002, Qingdao’s export and import value totaled USD16.925 billion, of which the export value was USD10.571 billion and the import value was USD6.354 billion, up 9.8%, 11.3% and 7.4% respectively over the previous year.

A total of 1,832 foreign-invested projects had been approved by the end of 2002, with a total invested foreign capital of USD5.524 billion (up 53.9%) and an actually used foreign capital of USD2.38 billion (up 48.8%).

There were 5,346 foreign-funded enterprises registered in Qingdao, an increase of 8.3% over the previous year. Among the investors, 64 are top 500 international companies who have established a total of 95 projects here, involving accumulative capital of USD1.22 billion.

Qingdao is rich in natural resources, grains and oil, forests and fruit, livestock and marine products, in particular. Dazeshan grapes, produced in Pingdu, are famous worldwide. There are a great many bays and coves along the coastline of Qingdao, with a large area of shallows ideal for marine culture. Marine products here include porgies, yellow croaker, common perch, abalone, oysters, prawns, scallops, sea cucumber, crabs and top shells.

Agricultural produce:	2,383,800 tons
Of which, Wheat:	1,085,900 tons
Corn:	1,094,700 tons
Cotton:	3,800 tons
Peanuts:	557,700 tons
Vegetables:	6,847,600 tons
Fruits:	579,700 tons
Meat:	678,400 tons
Of which, Pork:	227,200 tons
Beef:	51,300 tons
Mutton:	9,800 tons
Cow and goat milk:	339,900 tons
Eggs:	397,000 tons

There are many famous Chinese enterprises located in Qingdao, such as the Haier Group, Tsingtao Beer Co., Ltd, the Hisense Group, the Aucma Group, the Double Star Group, the Rubber Group and the Etsong Group. Hisense, Double Star and Aucma are all well-known Chinese enterprises. The Tsingtao Beer Co is a century-old enterprise while Haier is a new star rising out of China’s policies of reform and opening-up. Haier’s global sales income in 2002 surpassed RMB 72.3 billion.

Qingdao has 16 nationally famous brands, and 6 nationally well-known brands. Four companies have won national QC awards, and 11 companies have entered the nation’s top 500 rank. In addition there are a total of 125 city-known brands.

Qingdao’s financial sector is expanding rapidly. Many influential bankers have established branches and offices in Qingdao. Among these are the Bank of China, the Industrial and Commercial Bank, the Construction Bank, the Agricultural Bank, the Communication Bank, CITIC Industrial Bank, Everbright Bank, Hauxia Bank, the Commercial Bank, the Merchants Bank, the Hong Kong Po Sang Bank, the Japanese Yamaguchi Bank, the Hong Kong & Shanghai Bank, the Standard Chartered Bank, the Singapore Overseas Chinese Bank and the Hong Kong Southeast Asia Bank.

The insurance sector has also experienced rapid growth. The annual coverage in 2002 totaled RMB572.474 billion and the total insurance premium income of the year was RMB3.846 billion.

Qingdao has 25 maritime research institutes and educational and managerial institutions. Qingdao Ocean University is a national key university. More than half of China’s oceanic professionals and researchers are working in Qingdao where there is a wide range of instruments and apparatus for oceanic investigation and research.

The employment of foreign experts in Qingdao is being carried out rapidly. Over 2,010 technical and managerial staff in Qingdao have been abroad for training. Over 1,000 technical and managerial experts have been appointed to work in Qingdao. There is also an industrial park established for overseas Chinese scholars in which they can open their own businesses. In 2002, Qingdao successfully hosted an activity entitled the “Hundred Overseas Doctors’ Invention Week” and special business talks for international experts entitled “China in the 21st Century”.

* State-level Key Development Zones

Qingdao Economic and Technological Development Zone

Qingdao Economic and Technological Development Zone (QETDZ) was established in October 1984 under approval from the State Council. It covers an area of 220 square kilometers. From the population of 300,000 in the area 240,000 are permanent residents. Thus far, a total of RMB1.6 million has been injected into the construction of infrastructure facilities in the zone, including the Qianwan Port, Huangdao Oil Port, Jiaohuang Railway, and Jiaozhouwan Expressway. A well-developed infrastructure integrating road traffic, water supply and drainage, electricity, telecommunications, heat supply, gas supply and cable television has taken shape, making the zone one of the most favorable investment regions in China.

QETDZ will be developed around port, industry and tourism services. By emphasizing invitation of investment and large project construction, recently notable achievements have been made. Up to 2002, a total of 1,464 projects had been established in the zone, involving a total investment of USD 5.67 billion, contracted value of USD 4.45 billion and foreign direct investment of USD 2.24 billion. There are 173 projects with investment exceeding USD 10 million, and 28 projects with investment from large international companies.

The city government has made a strategic decision to “build the QETDZ into the city’s economic center” in the new century. The construction of four industrial bases for household appliances and electronics; petrochemicals; automobiles, containers and ship building; and steel, two centers for international shipping and logistics and a first class tourist resort is in full swing in the zone.

A five-year development plan involving the construction of an oil refinery, an automobile plant, a shipyard, a steel works, port facilities and a container manufacturer has been completed. The plan also incorporates other projects such as the renovation of Tangdao Cove, the landscaping of the administrative center, roads, water resources, a thermal power plant, an international trade center, environment greening, the “New Badaguan” project, a residential building project and a “University Town” project. All of which are contributing to the development of a modern new urban area on the west coast of Qingdao.

* Qingdao Free Trade Zone

Established on November 19, 1992 under the approval of the State Council, Qingdao Free Trade Zone is one of the 15 free trade zones in China and the only one in Shandong and in the Yellow River region. A series of preferential policies are in force in the zone including tax exemption and bonded warehousing. QFTZ covers an area of 38,000 square kilometers in which international practices are adopted. Currently, the zone is one the special economic zones in Mainland China enjoying the most preferential policies. Main business areas include international logistics, international trade, export processing, bonded warehousing and commodity exhibition. Centering round the move westbound of the economic center, and on the basis of the cooperation with Qianwan Port, QFTZ will focus on the establishment of four areas of operation namely, bonded-warehousing-backed by international material gathering and distribution, port-supported import and export processing, foreign-trade-based free trade, and international scientific and technological incubation. Emphasize will also be placed on the construction of an international distribution center, an international procurement center and a high-tech-based manufacturing center, contributing to the development of a modern international logistic center in northeast Asia.

After ten years of development, QFTZ is now a new hot spot for domestic and overseas investors.

Investors from 40 countries and regions and over 20 provinces and municipalities have established more than 2,000 business projects in QFTZ, including over 820 Chinese-foreign joint venture enterprises, involving a total FDI of USD1.2 billion. International companies including Itochu, Sumitomo, Mitsubishi, Nissho Iwai, Marubeni, National, Fuso, Lucent and Degussa have set up businesses here.

* Qingdao Hi-tech Industrial Development Zone

The Qingdao Hi-tech Industrial Development Zone is located in the state-level high-tech zone approved by the State Council in May 1992. In 2000, QHIDZ was named a national high-tech export base. In 2001, it was named a model state-level high-tech industrial zone. And in 2002, it was designated as a software industrial base in the national “Torch Program” and a national collegial science and technology park.

Bordering on the Laoshan Scenic Area and the Shilaoren National Holiday Resort, QHIDZ has perfect infrastructure facilities, convenient transportation and a beautiful natural ecology. The area is ideal for both high-quality living and business operation.

Thirteen of the fortune 500 companies including Lucent and Mitsubishi have established businesses in QHIDZ, marking the beginning of an industrial framework consisting of the three pillar industries of electronics, biotechnology and new materials. The zone has become a hot spot for Chinese and foreign investors.

* Pingdu Cross-Strait Agricultural Co-operation Experimental Zone

The Cross-Strait Agricultural Co-operation Experimental Zone in Pingdu, Shandong is the only State-level cross-strait joint venture experimental farm in Shandong, set up in March 1999 under the approval of the Taiwan Affairs Office of the State Council, the Ministry of Agriculture and the Ministry of Foreign Trade and Economic Co-operation. In December 2001, the Qingdao municipal government established a 22-square-kilometer special farming center in Nancun, Pingdu City named “Qingdao High-tech Agriculture Development Zone”. The purpose was to make use of local advantages in agricultural resources, labor, technology and markets, and further improve the local farming and sideline product processing and breeding standard by introducing leading farming, breeding and processing technologies from China’s Taiwan and foreign countries. In so doing, the development of highly yield, high quality, highly efficient and exchange-earning agriculture will be promoted, and local and provincial agriculture will be improved. More than 10 investment projects have been established in the zone, involving a total investment of RMB 150 million, of which RMB 30 million has been injected into zone infrastructure.

* Provincial-level Economic and Technological Development Zones

Under the approval of Shandong provincial government, Qingdao has established 6 provincial-level economic and technological development zones - Huanhai, Jimo, Laixi, Pingdu, Jiaonan and Jiaozhou. The infrastructure has been completed in all these 6 development zones, and the zones have an excellent investment environment and convenient transportation, which are drawing more and more foreign business people to invest here.