Georgia: growing presence of China

Agenda.ge All rights reserved

Agenda.ge
All rights reserved

Today, the struggling democracy of Georgia is in a delicate situation, stuck between the West, hardening its frontiers, and Russia, increasingly expansionist, and it is maybe the worst situation for such a small country. Far beyond “NATO’s border” and within Russia’s close neighborhood, taking a side is not a matter of choice, but a matter of survival. However, the rapidly growing presence of China in Georgia and the southern Caucasus opens up the possibility of a “Sino-Georgian third way”, as local confidence in Western is decreasing and fear of Russia increasing.

China’s interest for that region is not new nor especially unexpected. Chinese investment has been rising in the region for several years now, in search for economic opportunities and further diplomatic relations. Beijing’s interest for the South Caucasus as a strategic region  is more recent, mainly driven by Beijing’s ambitious project, the New Silk Road, for which Georgia and the South Caucasus are meant to become a major piece, due to their central geographic position. Despite being geopolitically fragile, Georgia’s position, at the crossroads of Asia and Europe, awakened Chinese interest.

A strong economic cooperation

Georgia-China cooperation was initially limited only to economy. Growth in this area has been very significant. According to GeoStat (Georgian National Statistics Office), Georgia-China trade and investment has reached new heights over the past years, making China Georgia’s third largest trade partner, just behind Turkey and Azerbaijan, and slightly ahead of Russia. The bilateral trade has risen from just under $115 million in 2006 up to over $820 million in 2014. Foreign direct investment from China is also positive for Georgia. Chinese FDI started to increase anew in late 2012, after years of low rate, rising from $9.6 million in 2011 to nearly $200 million in 2014, representing almost a fifth of total FDI for Georgia that year. According to recent news, Beijing is willing to put more money into energy, transportation, health-care, and infrastructure.

The Georgian government has been receptive to Chinese intentions. Economy Minister Giorgi Kvirikashvili met with officials from China’s Silk Road Fund, and unlocked $40 billion to help the NSR to develop. Georgian officials also began negotiations to boost Chinese tourism to Georgia, a priority for the country’s economic growth. China and Georgia are also working to set up a potential free trade agreement. In the same time, Tbilisi ratified an Association Agreement with the European Union, including a Deep and Comprehensive Free Trade Area, even if the E.U. seems to slowly withdraw from that region, farther than its usual zone. This is a proof of Georgia’s will to diversify and boast its growing but still fragile economy, by every possible mean.  In this context, Georgia was among the first countries to sign the Beijing-led AIIB, the Asian Infrastructure Investment Bank.

Georgia News Agency NewsDay newsday.ge All rights reserved

Georgia News Agency NewsDay
newsday.ge
All rights reserved

Which geopolitical impacts?

The Sino-Georgian cooperation remains primarily economic but also has geopolitical implications. As everywhere else in the world, further political engagement follows Chinese economic implications. This is for Georgia another opportunity to expand, maybe more a more interesting partnership than with Euro-Atlantic nations or with the regionally dominant Russia. Beijing resisted pressures from Moscow and supported Georgia’s territorial integrity, making sure Tbilisi becomes the corner stone of the NSR, thus Georgian security and stability will certainly become a top priority for China.

Skepticism towards the West in Georgia and South Caucasus is giving new breath to pro-Russia political and civil society groups. The Georgian government is under pressure to insure security and prosperity to the country against growing Russian expansion and decreasing western capitals. Some Georgian officials see China as an opportunity to out-match Russian domination, as the West is focusing on its “own territories”. Other growing regional powers, such as Turkey and Iran, also represent alternatives for Georgia to cope with Russian aggressiveness and Western distance.

What is next?

A potential next step for Sino-Georgian cooperation may be in defensive weaponry. Georgia has made little progress to acquire Western weapons systems, certainly due to U.S. and European concerns about provoking Moscow, but Chinese systems may serve as capable and not very expensive alternatives for Georgian armed forces, in need of decent anti-air and anti-tank weapons.

Chinese investments in favor of the “trans-Eurasian” economic agreement looks to be already positive for Georgia. Any further cooperation seems only to be a matter of time, which Georgian officials will very probably welcome warmly. The U.S. and the E.U. will likely be concerned with the growing Chinese influence in the South Caucasus, but cannot complain if Tbilisi seeks solutions to protect itself against Russia in the absence of Euro-Atlantic guarantees. Russia will certainly highly disapprove China’s growing presence in its “near abroad,” but has very few to no arguments to oppose Beijing, due to its international isolation and dependence on important Chinese energy agreements. If the current situation keeps going on this way, China is highly probable to become a vital long-term partner for Georgia and the South Caucasus.

Flavien Gouabault

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