Shanghai's residents were spared serious damage and disruption Further south, the financial capital of Shanghai avoided a direct hit, though strong winds downed power lines and blew away billboards.
More than 300,000 people were evacuated and thousands of ships called ashore.
Muifa has already left four people dead in the Philippines and 27 injured on the Japanese island of Okinawa.
Power cuts The category-one typhoon is currently about 310km (193 miles) east-north-east of Shanghai, moving north-west over the East China Sea at about 23 km/h (15mph). Its winds are gusting at up to 138 km/h (85mph).
After hitting Shandong, it is forecast to weaken to a tropical storm.
The storm earlier skirted China's eastern coast, causing strong winds and torrential rain. But Shanghai was spared serious damage.
"It does not feel like a typhoon at all," Li Hongjun, a visitor from Shaanxi province, told the Reuters news agency. "I would think a typhoon would feel much stronger and there should be no-one walking in the streets."
Power cuts were reported damaged in at least two residential areas, said Sang Baoliang, deputy head of Shanghai's flood control headquarters. A 24-year-old man was also reported missing while swimming in heavy surf in the city's Jinshan district, Shanghai Television reported.
In addition to evacuating residents and calling ships back to harbour, the authorities cancelled more than 200 flights and closed two bridges to outlying islands. Train and bus services were thrown into disarray.
In South Korea, the authorities have issued a tidal-wave and flood warning along the country's western and southern coasts. Many domestic flights between Seoul and the island of Jeju have been cancelled.
Heavy rain is also forecast for parts of North Korea, which suffered flooding late last month. About 30 people died, thousands of homes were destroyed and farmland was badly damaged, state media say.
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