Georgia sees surge in Chinese investment

Global Business

China’s Hualing group in a recognizable name in Georgia. The company is involved in building the largest business trade center in the Caucuses, on the outskirts of Tbilisi. Since 2009, Hauling has invested upwards of $500 million into infrastructure, forestry, and finance across the country.

CCTV’s Natalie Carney reports from Tbilisi in The Republic of Georgia.

Follow Natalie Carney on Twitter @NatalieCarney77

“This is the largest trade center that we have invested in Georgia. It will activate the whole Black Sea area after the construction is done. The trade center covers an area of 420 hectares and it is only part of our investment plan,” Wang Shengxin, general manager of the Hualing Group in Georgia, said.

Hualing was one of the first companies to take advantage of a Georgian push for foreign trade markets and investment following a souring of relations with Russia in 2006.

“Georgia for us is a unique country with very good resources and nice people,” Wang said. “The investment environment is very beneficial for the investments and also the scenery is beautiful so these are the reasons we decided to stay and develop here.”

China’s Hualing group may be the biggest investor in Georgia’s burgeoning economy, but it is certainly not the only one. According to data from the Georgian Statistics bureau, foreign direct investment from China to Georgia reached $218 million in 2014, with more than 20 Chinese companies operating in the country.

Bilateral trade has also surged between the two countries with Georgian exports to China increasing by over 400 percent in the last three years.

Maya Grigolia works for a research group conducting a feasibility study on a Free Trade Agreement currently being discussed between China and Georgia, which is expected to be signed this year.

“For example, the study shows that GDP will increase 0.05 percent only because of this free trade agreement and will increase Georgia’s exports up to 30 percent within 10 to 15 years,” Grigolia said.

China admits that Georgia has a key role to play in its Silk Road initiative as a hub between Asia and Europe. For one, Georgia’s comprehensive free trade agreement with the European Union can help expand China’s export markets.

“This free trade agreement has to be very careful, to bring the investor to Georgia,” Grigolia said. “To produce here, to use Chinese intermediate products, to finalize on Georgia’s territory, and then export to the European Union.”

Meanwhile the nearly completed Kars-Tbilisi-Baku railway will help facilitate the movement of goods from Central Asia and China to Europe. As will a new Black Sea port on Georgia’s western coast, being built by a joint Georgian-U.S. consortium.

Georgia’s economic stability is dependent on export and investment diversification. China and the One Road and One Belt Initiative are giving the country hope of a prosperous future.

Mamuka Tsereteli om Georgian economics
To find out more on Georgia’s economy and its growing presence on international markets, CCTV America spoke with in Mamuka Tsereteli. He’s a research director at Johns Hopkins Central Asia and Caucasus Institute.