Qingdao's coastal position means seafood is the thing to eat. The Yellow Sea provides clams, sea cucumbers, abalone, and the yellow croaker fish that Shandong cuisine treats with particular reverence. The local brewing heritage makes this also a city where drinking local beer at a seafood restaurant is essentially a civic duty.
The area around Minjiang Lu and the old German quarter has the densest concentration of seafood restaurants. The lobster and crab restaurants along the harbour road near the old ferry terminal are rough-and-ready but reliable: pick your live seafood from tanks at the entrance and it comes back grilled or steamed ten minutes later. Expect to negotiate the price before cooking.
For something more refined, the restaurants along the boardwalk near May Fourth Square serve similar seafood with better views and higher prices. The local specialty is Tsingtao beer clams — clams steamed in the local lager with garlic and spring onion, better than it sounds.