Georgia's Pivot: A Chinese Investment Gamble?

Georgia's Strategic Crossroads

Georgia, a small country nestled between Europe and Asia, finds itself at a pivotal moment in its history, facing a choice between maintaining its traditional ties with the West or forging a new path with China. This blog post will delve into the complex dynamics surrounding this decision and explore the implications for Georgia's future.

The Rise of China in Georgia

In recent years, China has emerged as a significant player in Georgia's economic and political landscape. With the signing of a free trade agreement in 2017 and the establishment of a strategic partnership in 2023, China has become a key partner for Georgia. Chinese companies have actively invested in Georgia's hydropower sector, transportation infrastructure, railways, ports, and free industrial zones. This has led to China becoming Georgia's third-largest trading partner, with Georgian exports to China reaching $737 million in 2022.

However, it is important to note that the relationship between Georgia and China is not without its challenges. Some memoranda of understanding signed between the two countries have not come to fruition, raising questions about the reliability of Chinese investment. Additionally, there are concerns among pro-Western observers in Georgia about the potential impact of closer ties with China on the country's foreign policy orientation and relations with Western partners.

A Geopolitical Tug-of-War

The competition between major powers for influence in the South Caucasus region has intensified, with Russia, the United States, the European Union, and China all vying for dominance. The war in Ukraine has further complicated the situation, as Moscow's isolation has made overland trade routes crossing Russia less favorable. This has led to a shift towards the Middle Corridor, a trade route connecting China to Europe via Central Asia, the South Caucasus, and the Black Sea. Georgia, strategically located on this corridor, has enthusiastically embraced its newfound role as a transit hub.

However, the deepening relationship between Georgia and China has raised concerns among Western powers, particularly the United States, Georgia's key strategic partner. There are fears that Georgia's support for China's global initiatives, such as the Belt and Road Initiative and the Global Security Initiative, could signal a shift in its foreign policy orientation away from the West. The timing of the strategic partnership agreement with China, just before the EU's decision on whether to grant Georgia candidate status, has further fueled these concerns.

A Delicate Balancing Act

Georgia's ruling party, the Georgian Dream (GD), faces a delicate balancing act between maintaining its relationship with the West and seeking alternative avenues for political and economic support. The country's aspirations for Euro-Atlantic integration have been hindered by democratic backsliding, with the Georgian government accused of rigging elections, cracking down on dissent, and imprisoning opponents. This has created a rift between Georgia and its Western partners, pushing the country towards alternative alliances.

At the same time, Georgia's relationship with Russia has been complicated by Moscow's invasion of Ukraine. Tbilisi has sought to balance its desire for security guarantees from Russia with its aspirations for Euro-Atlantic integration. This has resulted in a cautious rapprochement with Moscow, including abstaining from anti-Russian sanctions and increasing trade turnover. However, this has also drawn criticism from Western partners, further straining Georgia's relationship with the West.

The Allure of China

In this context, China's "no strings attached" policy becomes appealing to Georgia. The prospect of receiving financial aid, cheap loans, and investments without political conditions attached makes Chinese assistance attractive to the Georgian government, especially as they face potential losses of Western financial support. Additionally, China's model of techno-authoritarianism, with its emphasis on technology-driven security management, holds a certain allure for the GD, as it could provide tools to quell public protests and cement their autocratic regime.

However, there are risks associated with Georgia's pivot towards China. As Chinese digital and physical infrastructure becomes pervasive in the country, Georgia may find itself vulnerable to technological harassment, coercion, and surveillance by Beijing. Moreover, China's involvement in building Georgia's digital capacity could allow it to collect sensitive data and influence domestic politics.

The Future of Georgia's Geopolitical Orientation

In conclusion, Georgia's pivot towards China represents a complex interplay of economic, political, and strategic factors. The country's desire for economic development, coupled with its strategic location on the Middle Corridor, has made it an attractive partner for Chinese investment. However, the potential risks associated with this pivot cannot be overlooked.

Georgia must carefully navigate the geopolitical tensions between major powers and strive for a balanced approach that protects its national interests and ensures its long-term stability. While China offers economic opportunities, the country must also maintain its relationships with Western partners, who have been instrumental in supporting Georgia's democratic development and security.

The Georgian government faces a delicate task of diversifying its economic and political alliances while managing the expectations and interests of various stakeholders. Ultimately, the country's ability to maintain its sovereignty and chart a course that benefits its citizens will determine the success of its geopolitical orientation.

Georgia’s Pivot: A Chinese Investment Gamble?