In the case district- and city-level governments and Qingdao government departments and units under them, there is a need to develop the modern service industry immediately further open up the service business in a standardized, high quality way and strengthen the city's competitiveness. The following are ideas on increasing investment in the modern service industry in Qingdao:

Guiding concepts and developmental goals The original idea was to take the opportunity to gradually open up the service trade in a Post-WTO transition period, with the goal of building a national key city and world-famous city centered on the production and service industry, living service industry and burgeoning service industry advanced in the world, for the rapid development of production and services; it will be driven by improved manufacturing on the Shandong Peninsula and the Olympic sailing event to introduce 60 different types of service trade projects each year, under a "volume increase, quality improvement, efficiency first" principle, that are competitive enough that by the end of 2007. There will be a nearly perfect service trade system for investment breakthroughs in the modern service industry.

Work priorities

The first thing is to focus on building a manufacturing base to bring in at least 20 institutions to support value-added services for industrialization and for breakthroughs in investment in production and services to make the service industry a strong force in Qingdao’s manufacturing development. That involves the following:

1. In the area of finance and Insurance, work on a regional financial center needs to begin so we can introduce domestic and foreign finance and insurance projects for foreign trade and "Six industry clusters", with the main sources being East Asia, Southeast Asia, Europe and the US; Chinese-backed projects will focus on institutions for regional management with an influence in neighboring regions. There will be a push to expand existing foreign finance and insurance institutions into the Huangdao and Chengyang districts and five county-level cities under Qingdao, under the control of the Qingdao Economic and Trade Commission and Huangdao and Chengyang district governments.

2. The focus is on expanding the trust and securities business and an increase in capital and business expansion while emphasizing new institutions and improved financial services and credit for large groups and small to mid-sized enterprises, with more foreign investment and Chinese-foreign joint venture involvement in trusts, securities and investment, under Qingdao Development and Reform Commission, Economic and Trade Commission, and State Assets Administrative Commission control.

3. An agency is needed to increase cooperation between Qingdao law and accounting firms with their foreign counterparts to get State and Shandong provincial support for setting up Sino-foreign accounting firms, and to get foreign law firms to open offices in Qingdao, and to promote economic development. Plans call for promoting foreign investment in design work, R&D, marketing, consultation, advertising, education and training, translation, architectural, engineering, and real estate services, under the control of the Qingdao Judicial Bureau, Municipal Bureau for Industry and Commerce, Construction Commission, Foreign Affairs Office, and Council for the Promotion of International Trade.

4. In the area of port logistics, Qingdao is depending on building an international port at Qianwan and an international logistics park as a "zone and port linkage" pilot to develop portside international logistics and improve its four major functions – international transshipment, distribution, procurement, and transit trade -- and develop a modern logistics service business that covers bonded goods, warehousing, processing, distribution, information and management. Airport logistics services also need to be improved with value-added service at the core, all of this under Qingdao Communication Commission, Port Office, Economic and Technological Development Zone, Bonded Zone, Export Processing Zone, Council for the Promotion of International Trade, and Municipal Investment Bureau control.

5. In the field of post and telecommunication services, there needs to be cooperation between telecoms and high-tech companies handling electronic information in Qingdao and foreign investors to establish equity- or contract-based value-added telecommunications delivering value-added services, including telephone information, computer information, e-mail, and electronic data exchanges. Foreign companies need to be brought in to set up postal and express delivery joint ventures under Qingdao Municipal Information Bureau and Postal Bureau control.

6. In information and communication the emphasis is on introducing foreign investment for transportation infrastructure, including roads and stations and foreign transportation companies and logistics management and for developing a transportation e-commerce system. The goal is the opening up of and investing in information services, with the information software parks as the carrier, under Qingdao Communications Commission and Municipal Information Bureau control.

In introducing and developing at least 20 retail business models and leisure service projects every year, centered on better commercial service categories and a breakthrough in living service sector investment to improve the city’s style and local people's lives, the following are needed:

1. In the area of retail sales, the focus is on new commercial models, including famous specialty shops, exclusive shops, discount stores, 24-hour convenience stores, and fresh food supermarkets, with top global brands, service brands and commodity brands to give Qingdao’s markets diversity.

2. In catering and recreation, in view of the success of the 2008 Olympic Games, there are plans to introduce restaurants from different countries and regions and various snack shops, western restaurants, and fast food shops. Foreign investors are encouraged to establish bars, tea houses, coffee houses, beer halls, and cigar rooms in central business districts and coastal tourist areas. The northern part of Qingdao, where there are many Korean businesses and visitors, the focus is on Korean delicacies for a sort of convergence effect, under Qingdao Economic and Trade Commission, Tourism Bureau, and Planning Bureau, as well as district control.

3. In the area of living, plans call for foreign investment in building community commerce centers and modern residential services in the laundry busineess, cleaning, hairdressing, fitness, housekeeping, and telephone, online, and mail order shopping. Foreign investment is needed to make traditional living services more standardized and modern to improve the level and quality of service, under Qingdao Economic and Trade Commission, Construction Commission, Planning Bureau, and district control.

4. For culture and entertainment, the city will introduce foreign investment for wholesale and retail equity and joint ventures in newspapers, periodicals, and electronics and audio-visual products. Foreign culture and entertainment agencies will be asked to cooperate with Qingdao through joint ventures to change its movie houses and other culture and entertainment facilities, under Qingdao Culture Bureau and Press and Publication Bureau control.

5. For the overall layout, there needs to be planning and control in the building of large supermarket projects in the four Qingdao districts, and for large supermarkets, specialty stores, and shopping malls in the northern and western parts of the city. And new business models need to be developed for the new eastern district and world famous brand hotels need to be introduced, while further improvements on the environment in the western, northern and eastern parts of Qingdao is needed. Foreign investors need to be encouraged to establish shops and stores although we need to be cautious in introducing large commercial projects through leasing, without input in fixed businesses, all of this under Qingdao Economic and Trade Commission, Tourism Bureau, Planning Bureau, and district control.

Qingdao plans to introduce more than 20 social service agencies suited to urban development, each year, for breakthroughs in investment in emerging services, to improve overall services and the city’s influence, in the following ways.

1. for the headquarter economy, it will seize the CBD opportunity and its current building advantages to create a better environment for multinational and other large company headquarters or offices that function as regional headquarters to promote the flow of talented personnel, materials, funds, and information for a significant improvement in its industrial and international level, under Qingdao Economic and Trade Commission, Municipal Bureau of Foreign Trade and Economic Cooperation, and Shinan, Shibei, and Laoshan district controls.

2. In the area of conferences and exhibitions it will introduce foreign agencies, extend its conference and exhibition chain, and develop related services, in commerce, trade, tourism, design, remodeling, advertising, traffic, communication and logistics, and develop an exchange site by hosting various international expos and exhibitions to promote trade negotiations and investment, under Qingdao Municipal Bureau of Foreign Trade and Economic Cooperation, Economic and Trade Commission, and Laoshan and Shinan district controls.

3. In the area of procurement, the Qingdao procurement service center will take center stage and try to increase investment by the world's Top 100 retailers and encourage them to establish transnational procurement centers and related service agencies here, while organizing annual procurement fairs and promoting connections with famous transnational procurement businesses and getting Qingdao's industrial products into the international sales network, under Qingdao Council for the Promotion of International Trade control.

4. In the area of education and medical care, Qingdao will look for foreign investment in education with emphasis on cooperation in vocational education, continuing education and higher education and introducing quality educational resources and funds from abroad to modernize and internationalize its education, while encouraging the development of international schools and the schooling of children of international business people in Qingdao. Meanwhile, it will get its existing hospitals to cooperate with foreign counterparts and change them with foreign investment and bring in advanced technology to improve medical treatments and services, under Municipal Education Bureau and Municipal Health Bureau control.

5. As for tourism services, the idea is to establish more Chinese-foreign joint travel agencies, bring in more overseas management and operational concepts, improve service quality and increase the market share, while introducing foreign investment in large tourist projects with a significant impact and high added-value output and extending the industrial chain for leap-frog development of tourism in Qingdao, under Municipal Tourism Bureau control.

6. In the area of sea and air services, there will be new international air routes introduced to increase the number of visitors and boost the value-added service output in restaurants, hotels, business exchanges, transportation, logistics, tourism, and finance, with new sea routes opened as well and large domestic airlines being encouraged to establish aviation logistics centers in the airport vicinity, under Qingdao Port Office control.

Assurances

Qingdao will improve its organization and leadership by investing in the modern service industry as a major way to increase tax revenues, raise the city's level, and increase its competitiveness. To improve its leadership, it will have a conference system to organize, coordinate, and push investment promotions citywide, with the Qingdao Economic and Trade Commission responsible for the conference and departments at various levels improving their leadership based on their respective functions, and the removal of inter-departmental communications barriers and industrial monopolies, while promoting investment in the service and trade sector to ensure new projects each year in every field, as China promised during its accession to WTO.

There will be more favorable policies to support efforts by departments responsible for introducing service and trade projects, funds for investment promotion, and ways to motivate the departments in developing the service trade and modern service industry market access. This will allow Chinese from Hong Kong and Macau to establish their own business in Qingdao's service industry and register with the industry and commerce administration.

There will be a more aggressive approach to promoting investment by studying the various resources across the city and preparing a project database and service trade investment carrier. The city will use direct investment promotions with an eye on its particular conditions, for professional investment, online investment, and by business. During the“Qingdao Korean Week”, in 2005, it planned a Sino-Korean service and trade investment meeting and organized a “Hong Kong – Qingdao Service and Trade Project Road Show” for a service industry investment move for Hong Kong investors.