Multinational corporations flock to Qingdao

QINGDAO: Much more than a tourist destination, Qingdao's strong economic growth and mature investment environment make the city a magnet for multinational coporations.

A 2006 survey of China's best cities for foreign investors ranked Qingdao No 3, behind Suzhou, in East China's Jiangsu Province and business hub Shanghai.

"Qingdao boasts a favorable investment environment with abundant resources and mature service sectors," mayor of Qingdao Xia Geng said.

"Most of the multinational companies benefit a lot from the investment in Qingdao."

The improved investment environment in Qingdao has attracted dozens of conglomerates such as GM, Intel, IBM, Motorola, Dell, and GE - from the US - and Volkswagen from Germany, Toyota from Japan, and LG from the Republic of Korea (ROK).

Greater capital flows have followed in their wake.

By the end of 2006 nearly 160 Fortune 500 companies had settled in Qingdao, according to the Qingdao Foreign Trade and Economy Bureau.

The city's first-half total trade volume reached $20 billion yuan ($2.6 billion), up 20.6 percent on last year.

Multinationals have invested in more than 20 sectors including electronics, communication equipment, chemicals, textiles and electric machinery, to name just a few areas.

As a center of foreign investment, Qingdao Economic and Technological Development Zone has attracted 370 projects worth $10 million and 12 bigger projects worth more than $100 million; among them 50 projects involving Fortune 500 companies.

The Qingdao Branch of Sodexho Shanghai Management and Service Co Ltd, invested by Sodexho Alliance France, the world's leading food and facilities management services company, recently began operations in the city's development zone.

So far, the company has signed service contracts with some local enterprises, like the home appliance makers Haier and Hisense.

LG, the second biggest enterprise in ROK, invested $389 million in a chemical plant in the city and later became Qingdao's leading petrochemicals manufacturer.

Qingdao Port, one of the world's top 10, recorded throughput of 130 million metric tons in the first six months of 2007 and handled 4.5 million twenty-foot unit containers.

Qingdao Port signed a contract with the AP Moller Maersk Group of Denmark, P&O of Britain, and the China Ocean Shipping (Group) Company (COSCO), investing $887 million jointly to expand its Qianwan container dock to become China's largest.

The increasing investment of multinationals in Qingdao has helped form industry clusters in the city and spur service industries such as finance, logistics and education.

(China Daily 08/16/2007 page24)