CONFIDENTIAL
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4.
Figures in this report, in particular those from paragraph 18 onwards, were mostly quoted verbally by the Chinese officials and may not necessary be consistent. The unit of currency used is also not always clearly specified to us. Wherever possible, the figures have been verified against relevant data available to the Department from other
sources.
General Information about the Two Cities
5.
Qingdao and Dalian have much in common in their history and economy.
Both were founded about a hundred years ago - Qingdao in fact had only celebrated its
centennial anniversary recently; were leased to foreign powers in the year 1898 - Qingdao,
then know as Jiaozhou Bay ( 膠州灣 ), to Germany and Dalian to Russia; were
later occupied by Japan up to the end of World War II; their fine ice-free natural harbours
have been used by the colonists and the Chinese alike as naval base; designated as one of
China's 14 'open coastal cities' in 1984; both are important seaward outlets for a peninsular
hinterland in North China - Shandong Peninsula (4) and Liaodong Peninsula
( ( 遼東半島 ), and serve as major terminals for exporting China's crude oil; being roughly the same size and at a similar state of industrial development. The general situation
of the two cities are shown in Annex III.
6.
Qingdao is located in the southeast of Shandong Peninsula and is the most
important trading port in China between Dalian and Shanghai. Its funnel-shaped Jiaozhou Bay gives the city one of the finest natural harbours in China.
7.
Qingdao has an area of 10 654 sq. km and its population in 1989 was 6.8
million. The city district on the east of Jiaozhou Bay had an area of 1 102 sq. km and a
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