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Qingdao

qingdao

Qingdao, the largest city in China’s eastern Shandong province, is a major seaport best known for its Tsingtao Beer. Qingdao hosts one of the world's busiest seaports –handling 480 million tons of cargo in 2014.

In 2014, Qingdao’s GDP exceeded RMB 869.21 billion, up eight percent compared to the previous year. The city’s primary industry contributed RMB 36.26 billion and its secondary industry RMB 388.24 billion (8.4 percent growth). The remaining RMB 444.71 billion came from the service sector, which grew 7.9 percent year-on-year. Notably, Qingdao’s gross ocean product (GOP) in 2014 totaled RMB 175.11 billion, contributing more than 20 percent of the city’s GDP.

According to Qingdao Customs, the city’s total import and export volume amassed US$79.9 billion in 2014. The U.S. is one of Qingdao’s major trade partners. In 2014, Qingdao exported US$8.34 billion of goods to the U.S., accounting for 18.2 percent of the city’s total exports, while U.S. exports to Qingdao totaled US$2.42 billion. Qingdao’s top four imports are textiles (US$790 million), agricultural products (US$5.78 billion), electro-mechanical products (US$7.61 billion) and high-tech products (US$3.92 billion).

Business Opportunities

Ocean-related industries

The sum of ocean-relation industries, or the so-called “blue economy” in Qingdao, is widely seen as the economic future of the city. Qingdao has a 730.64 kilometers zigzagged coastline that possesses an invaluable stock of sea resources. At present, 30 percent of China’s marine research institutions are located in the city. However, despite the abundance of marine resources, Qingdao’s lack of supporting technology and professional equipment has greatly impaired the development of its blue economy. As such, there is a significant opportunity for U.S. exporters able to manufacture such products.

Aviation

In December 2015, China set up Qingdao’s first general aviation airport in Qingdao West Coast New Area, indicating the government’s intention to develop the city’s general aviation industry. According to research, by the end of 2013, the number of China’s general aviation airports was only 0.37 percent of that of the U.S. Since China’s civil aviation needs are increasing, the industry has been growing at a fast pace to keep up with strong demand. It is estimated that China will need over 10,000 light aircraft within the next five years in order to meet the general aviation sector’s rapid expansion.

The U.S. Federal Aviation Administration and the Civil Aviation Administration of China have both endorsed the U.S.-China Aviation Cooperation Program, which was created to promote technical, political and commercial cooperation between the two countries. The U.S. is home to many major players in the aviation industry and large manufacturers of aircraft engines. While direct investment into China’s aircraft industry is still restricted, exporting engines, auxiliary power units and air navigation instruments is strongly encouraged by the Chinese government.

Development Zones/Areas

Qingdao West Coast New Area

In 2014, China’s State Council approved the establishment of the Qingdao West Coast New Area, which is located on the west coast of Jiaozhuo Bay between the Beijing-Tianjin-Hebei and Yangtze Delta regions. Serving as a strategic base for deep-sea and offshore exploration, the New Area is expected to become the leading economic hub of Shandong Province, equivalent to Pudong in Shanghai.

Apart from the current six pillar industries within the zone, such as shipping and petrochemistry, the area is now promoting the development of 10 emerging industries, namely:

1. Marine bio-pharmacy

2. Yachts and cruises

3. General aviation

4. Maritime finance

5. Film and culture

6. Leisure

7. Information technology

8. Seawater desalination

9. Ocean new energy

To date, nine national-level industrial parks have been established in the New Area, including the Qingdao Tax-free Port, the Modern Agriculture Base and a high-tech zone exclusively for ocean-related industries. The New Area aims to be an international port and testing ground for various ocean-related economic initiatives.

Qingdao National High-tech Industrial Development Zone

Established in 1992, the Qingdao National High-tech Industrial Development Zone is China’s software industry base. Prominent industries include science services, software & IT, high-end equipment manufacturing, marine bio-pharmaceuticals, marine equipment manufacturing and energy saving & new materials. The zone offers import duty reductions for imported marine bio-pharmaceutical products and marine equipment on a case-by-case basis.

In 2014, the zone’s total trade volume increased by approximately seven percent to US$2.3 billion. The zone also includes the “blue silicon valley” – a world-class research and development center for marine science and technology. Over 35 percent of the zone’s total population is involved in research, with more than 200 marine scientists from China and overseas conducting on-site research. In obvious reference to its U.S. namesake, Blue Silicon Valley is expected to be a driving force in the development of the city’s blue economy.

Sister City of Long Beach, California

The year 2015 marks the 30th anniversary of the establishment of a sister city relationship between Qingdao and Long Beach, California. The two are both port cities and have close trade relations. It is reported that nearly two-thirds of Long Beach’s trade is with China, and the value of trade with the Port of Qingdao alone is worth US$7 billion a year. Qingdao has expressed an eagerness to learn clean technology techniques and cutting-edge elder care services from Long Beach and the U.S. in general.

Contact Information

U.S. Commercial Service - Beijing

No. 55 An Jia Lou Road, Chaoyang District

Beijing 100600, China

Tel: (86-10) 8531-3000

Fax: (86-10) 8531-3701

Email: office.beijing@trade.gov


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