Plans for a Chinese Port Roil the Politics of a Former Soviet Nation

New York Times

13-03-2025

For more than a year, pro-Western marchers in Georgia, a former Soviet republic that borders Russia, have been accusing their government of allowing Moscow to increasingly reassert its sway over their country.
But driving around this nation of 3.6 million people in the heart of the mountainous Caucasus region, the influence of another ambitious power becomes apparent. China has been stepping up its activities in the region in recent years, building infrastructure and expanding trade routes that it hopes will boost its economy.
In central Georgia, workers from China are erecting soaring viaducts and cutting dozens of tunnels through hard rock to build the first modern highway to link the east and west of the country. In the north, a 5.5-mile tunnel is being bored through the mountains by China Railway Tunnel Group to expand an existing highway to Russia.
To the west, preparations are underway for another Chinese company, China Communications Construction Company, to develop Georgia's first deep-sea port on the Black Sea as part of Beijing's Belt and Road infrastructure and trade initiative.
The port, as yet unnamed, is now at the center of a debate in Georgia and abroad about China's growing influence in the region and the Caucasus nation's pivot away from the West. Inflaming the situation is the fact that the project was stripped from a group of Georgian, European, and U.S. companies — the Anaklia Development Consortium — before eventually being promised to the Chinese company last May.
Salome Zourabichvili, the former Georgian president who emerged last year as a leading voice for the pro-Western opposition, said the move was like 'stabbing our relations with our American and European partners.'
In July, a State Department official said that awarding the port project to the Chinese company was 'incompatible' with wanting to join 'U.S. and E.U.-based international organizations.' In 2019, the United States had billed the port as something that could 'prevent Georgia from falling prey to Russian or Chinese economic influence.'Last week, Representative Joe Wilson, Republican of South Carolina, criticized the decision, saying it benefited China at the expense of American companies.
The Georgian government has said that the decision to hand the port to the Chinese company would ensure it was implemented 'at the highest level.'
'Chinese cargoes are of particular importance for the most effective operation of this port,' Irakli Kobakhidze, Georgia's prime minister, said shortly after the announcement.
And some analysts see the country's pivot away from the West as a rational choice given the geopolitics of the region.
'Georgia is trying to get more from China, the actor that is getting stronger in the region,' said Dimitri Moniava, head of the Center for Strategic Communications, a research group in Tbilisi, the Georgian capital.
Situated in the dilapidated former resort town of Anaklia, where packs of stray dogs now patrol the swampy grounds of abandoned hotels, the port is likely to transform international trade in the Caucasus and the broader region. For Georgia, the port would help develop the country as a regional transport hub.
For China, the port would become a gateway to the Caucasus, linking Asia with Europe across what it calls the 'middle corridor.' It would allow Chinese companies to ship their goods from China via railways in Central Asia and across the Caspian to Europe, skirting Russia, which has been the target of Western sanctions because of the war in Ukraine.
'Georgia is a key link for the middle corridor and Anaklia port could be the pivotal last nail,' Zhou Qian, China's ambassador to Georgia, said in an interview. 'Georgia's location is very, very important' for providing 'connectivity between Europe and Asia,' he said.
The Georgian government has said that the details of the deal are still being figured out, but that the Chinese company will own 49 percent of the port, with Georgia holding the rest as a majority stake. The Georgian government says it expects the Chinese construction company to invest $600 million in the first phase.
China Communications Construction Company did not respond to requests for comment.
Russia, which is still considered to be Georgia's main trading partner, could also be a major beneficiary of the project. Novorossiysk, the main Russian port on the Black Sea, has been hobbled by Western sanctions, and with the new Chinese-built routes, goods could flow into and out of Russia unimpeded across the Caucasus.
The port situation highlights how the rivalry between China and the United States is growing in the region, pulling in smaller countries like Georgia.
'On the one hand, you'll have China, which will be aligned with Russia, on the other you will have the West,' said Ram Ben Tzion, the chief executive of Publican, which analyzes the evasion of trade restrictions. 'This port is exactly at the crossroads of these two worlds.'
Projects like the Anaklia port have also become increasingly important for Chinese companies as economic growth slows in China, said Brad Parks, who studies Chinese lending and trade practices at the Center for Global Development, a think tank in Washington.
'It is really mostly about China dealing with its own economic weaknesses at home,' Mr. Parks said.
Anaklia Development Consortium had been doing dredging and other work as part of the port project when its contract was canceled in 2020.
Mamuka Khazaradze, the former head of the consortium, said he believed geopolitics was behind the decision by the governing Georgia Dream party to drop his company's contract. The party is run behind the scenes by Bidzina Ivanishvili, a reclusive oligarch with long ties to Russia. Mr. Khazaradze was elected as an opposition member of Parliament in October but, like other members of the opposition, has been boycotting the legislature.
Mr. Khazaradze said he had seen a hint of the shift over the port in 2017, when Mr. Ivanishvili summoned him for a meeting. 'He asked: 'What are Americans doing in the Black Sea?'' he said. 'He asked me to stop the project,' he said. 'It was the first sign that these guys were changing the direction of the country.'
Mr. Khazaradze said he had invested more than $40 million into the project and refused to pull out. The government then opened a criminal case into money laundering against him and his partner, and then canceled the port contract.
Anaklia Development Consortium fought back in a European arbitration court but last year lost the case, with the court saying the group had 'assumed the risk that the government would undermine the project.' Another case in the Netherlands is pending.
Representatives of the Georgian government did not respond to requests for comment. In the past the government said the Anaklia Development Consortium was dropped because it had insufficient funds to complete the project. (Mr. Khazaradze has denied that.)
Mr. Khazaradze then founded a political party called Lelo that has been organizing protests against the government, which won an election in October that has been contested by the country's highly fractured opposition.
Giorgi Gakharia, who was prime minister when the Anaklia Development Consortium contract was canceled, also said Mr. Khazaradze and his partners did not have enough money to complete the project.
'They simply couldn't fulfill their obligations," said Mr. Gakharia, who has since parted ways with Mr. Ivanishvili and is now siding with the opposition. In an interview, he said there had been no pressure from Mr. Ivanishvili to cancel the project.
For now, Anaklia remains derelict. A rusty yacht floats in the town's swampy marina, flanked by the rusty skeleton of what was going to be a Chinese-themed restaurant before it was abandoned a decade ago.
But trucks nearby are now hauling giant stones from across Georgia to use in the construction of a breakwater for the port. If all goes to plan, the site will be transformed in about six years into a bustling hub for up to 600,000 containers.
Jemal Kvartskhava, who oversees a few dozen men bringing stones to the site and building accommodation for an expected surge of workers, said he didn't really care who built the port as long as it becomes operational.
'This project is good,' said Mr. Kvartskhava, 28. 'It will bring new energy to the country.'