The area of which Qingdao is located today was called Jiao'ao when it was administered by the Qing Dynasty. In 1891, the Qing Government decided to make the area a primary defence base against naval attacks, and planned the construction of a city.
Little was done, however, until 1897 when the city was ceded to Germany. The Germans soon turned Tsingtao into a strategically important port that was administered by the Department of the Navy rather than the Colonial Office. They based here their Far East Squadron, allowing the fleet to conduct operations throughout the Pacific.
Since 1898 the marines of III. Seebatallion were based at Tsingtao. The German Imperial government planned and built the first streets and institutions of the city we see today, including the world-famous Tsingtao Brewery. German influence extended to other areas of Shandong Province, including the establishment of rival breweries.
Soon after the outbreak of World War I, the German forces, under Admiral Graf von Spee, left Tsingtao rather than waiting to be trapped in the harbour by Allied fleets. After a subsequent minor British naval attack on the German colony in 1914, Japan occupied the city and the surrounding province during the Siege of Tsingtao after Japan's declaration of war on Germany. The failure of the Allied powers to restore Chinese rule to Shandong after the war triggered the May Fourth Movement.
The city reverted to Chinese rule in 1922, under control of the Republic of China. The city became a direct-controlled municipality of the ROC Government in 1929. Japan re-occupied Qingdao in 1938 with its plans of territorial expansion onto China's coast. After World War II the KMT allowed Qingdao to serve as the headquarters of the Western Pacific Fleet of the US Navy. On 2nd June, 1949, the CCP-led Red Army entered Qingdao and the city and province have been under PRC control since that time.
Since the 1984 inauguration of China's open-door policy to foreign trade and investment, Qingdao has developed quickly as a modern port city. It is now the headquarters of the Chinese navy's northern fleet.
Qingdao is now a manufacturing center, and home to Haier Corporation a major electronics firm. The city has recently experienced a rapid growing period, with a new central business district created to the east of the older business district. Outside of the center of the city there is a large industrial zone, which includes chemical processing, rubber and heavy manufacturing, in addition to a growing high tech area.