Drop in Ocean – Chinese Investments in Georgia

Gustave Courbet: The Wave // Public domain

Following the publication of the Sino-Georgian strategic cooperation statement, discussions on the ups and downs of this document have become a focal point in the Georgian media. This is not surprising since the issue concerns one of the largest and most ambitious states in the world, and its foreign policy moves are constantly at the center of attention.

Yet, a quick look at the China-related stories in the Georgian media highlights a distinct line of internal political resistance and the particular media outlet’s political inclination. Yet due to the limited availability of information in Georgian, people form their perceptions of China based solely on what their chosen media source conveys.

In order to spread propaganda messages and narratives crafted by the Chinese Communist Party, dedicated programs air on various channels from time to time, exclusively featuring news about the People’s Republic of China. Recently, these programs incorporated exclusive interviews with the Chinese ambassador, directly conveying the agenda and objectives of the propaganda.

Georgian Dream MPs and propagandists echo the narratives of the Chinese Communist Party with remarkable precision. “The fascination by economic cooperation with China” is one of their favorite talking points, and they repeat with absolute conviction that only “fools refuse” investments from China, for which the Georgian government works tirelessly.

Hereby, we need to emphasize that genuine success in economic relations can be gauged by a surge in direct investments and heightened interest from numerous companies entering the country, resulting in the creation of additional jobs and increased incomes fueled by external capital.

It is important to note that when observing the infrastructure developments such as roads, bridges, and tunnels in Georgia, a substantial portion of the funding originates from the Georgian taxpayers, specifically allocated in the state budget. These Chinese companies execute projects at the Georgian nations’ behest, being funded and directed by the Georgian government. As a result, their involvement has no correlation with the “growing” economic cooperation and the “enhanced economic appeal” of the country, which is primarily attributed to the successful work of the government.

The truth is best reflected by official statistics, and nothing is more accurate and reliable than that. Without any additional explanations and interpretations, we present the data published by the Department of Statistics of Georgia over the years regarding foreign direct investments. This data unmistakably illustrates the government’s complete failure to attract Chinese investments, particularly in contrast to the lofty claims of significant interest and “immeasurably deepened” relations.

Chart 1. FDI from PRC 2010 – 2022 in Thousand USD

As can be clearly seen in the present table, China’s investments in the country are so insignificant and meaningless that it is impossible even to consider them seriously. Meanwhile, in the wake of the government’s “effective steps”, even those minor investments are falling year by year. For example, in recent years, investments have decreased almost twice compared to 2018. The benchmark for 2020 and 2021 is simply negative. Naturally, the main argument of the opponents regarding the years 2020 and 2021 starts with the “COVID-19” pandemic, although the pandemic did not prevent Georgia’s real strategic partners from investing in the country. See the corresponding table.

Chart 2. FDI by countries compared to PRC, 2020 – 2021, in Thousand USD

The share of a country with a huge and “most successful” economy in Georgia’s investment basket is extremely small, and the government’s policy, which promises huge results, has led nowhere since 2016. Investments made by the People’s Republic of China were characterized by growth; in 2013, it exceeded 100 Million USD, and in the following year, 2014, it doubled and reached 221 million USD.

However, after that, a sharp decrease began, and its average figure is a completely symbolic and meaningless reality. The chart below clearly shows the Dynamics of 2011-2022:

Chart 3. The share of PRC FDI in Georgia. 2011 – 2022

The truth is that China does not appear among the top 10 major investors in Georgia during the tenure of the “Georgian Dream” party in government:

Chart 4. Top 10 countries by FDI to Georgia, 2015 – 2022, PRC is not among them.
in Thousand USD

Mathematics is the best friend for unveiling the truth. The numbers do not lie and do not perfectly describe the partnership, interests, and foreign policy objectives of states.

Written by Tinatin Khidasheli

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