Georgia on my mind - and China's too

Having long ignored the Caucasus region, China is now showing intense interest in developing Black Sea infrastructure, not least in Georgia. The West is pushing back.

I’m just back from a trip to Georgia, where I was visiting my daughter

Ailis Halligan

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While there, I published “A week in Tbilisi and beyond” on When The Facts Change – a short travel piece describing the attractions of visiting this fascinating country, including days trips from the capital and a brief appreciation of the local food and wine.

This is the second piece based on my Tbilisi trip. It’s about geopolitics – specifically Georgia’s fast-developing relations with China and the intensifying battle between Beijing and Washington for control of an ultra-strategic Black Sea deep-water port scheduled to be built very soon.

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Why Does Georgia Matter?

For centuries, Georgia has been a transit hub for global trade and energy routes. Lying at the crossroads of Europe and Asia, with access to the Caspian Sea via Azerbaijan and its Black Sea coast facing Europe, this small but hugely strategic country has long been a gateway between East and West.

I’ve spent several years living in and travelling around the Former Soviet Union – my first job in journalism was as a Moscow Times columnist and Russia-based reporter for The Economist back in the mid-1990s. Since then, I’ve watched the ebbs and flows of the post-Cold war battle for supremacy in Georgia pretty closely.

Traditionally, Russia and the West have vied for dominance in Georgia – with the US and the European Union keen to undermine Moscow’s long-standing influence over what was once, of course, a constituent part of the USSR. But what struck me during this my most recent trip, was Tbilisi’s intensifying relationship with Beijing and Georgia’s growing role in China’s era-defining Belt and Road Initiative.

While China has traditionally shown little interest in the Caucasus region, that has changed dramatically over the last few years and particularly since Vladimir Putin invaded Ukraine in February 2022, for reasons that will be explained below. From construction to technology to media and culture, China’s influence in this small but vitally important country is now palpable – as Beijing seeks to rapidly upgrade a long-neglected Georgia-dependent trade route from China to Europe, a “New Silk Road” known as the Middle Corridor.

The Anaklia project – to build Georgia’s first deep-water port – is now geopolitically pivotal given China’s increasing interest in Georgia as a transit route

Wedged between Russia and Turkey, and a natural “land bridge” between the Caspian Sea that accesses Central Asia and the Black Sea gateway to Europe, few nations are as strategically located as Georgia.

What this post highlights specifically is the little-noticed but pivotal ongoing power struggle over the future of what would be Georgia’s first deep-sea port at an obscure Black Sea resort called Anaklia – a facility set to be of very considerable commercial, military and geopolitical significance. This is just the latest episode in the long-standing external battle for influence in Georgia – and related control of the increasingly important global trade routes that pass through this country.

From construction to technology to media and culture, China’s influence in this small but vitally important country is now palpable.

The contract to build and operate the Anaklia port – in the gift of the Georgian government, a government that has lately been openly defying the West – is now very much in the balance. While an American-led consortium was lined up to finance and build the port at Anaklia, that contract was cancelled by the Georgian government in 2022.

Then, in May 2024, after a couple of years of intense commercial and diplomatic Sino-Georgian engagement, the Tbilisi government announced that a Beijing-backed consortium was the sole bidder to build and control the Anaklia port, leading many to assume that the question was settled in China’s favour.

Over recent weeks, though, Washington has become heavily engaged in trying to stop Beijing from winning the contract, after Georgia’s economics minister visited the US –a trip I noticed because it happened while I was in Tbilisi !

The Georgian government is now downplaying China’s involvement with the proposed Anaklia port, amid speculation that a US-consortium could yet win back control over this supremely strategic project.

And if you want to understand more about Georgia, and the fascinating broader power struggle for control of “the New Silk Road” from China to Europe and beyond, then please read on …

Georgian Dream

Georgia’s era-defining “Rose Revolution”, which took place in 2004, amounted to a series of large-scale protests that led to the ousting of Eduard Shevardnazde – who had been President since 1995. Having previously been the last Foreign Minister of the USSR, ahead of the collapse of the Soviet Union in 1991, Shevardnazde had retained very close links to Moscow.

He was replaced as Georgian President by US-educated Mikheil Saakashvili – and since then, particularly in the aftermath of the 2008 Russo-Georgian war, Georgia has been seen primarily as a Western ally, broadly resisting integrationist pressure from Russia. Alignment with Nato and an ambition to join the EU – a goal supported by the majority of the population – have long been at the heart of domestic politics and are enshrined in Georgia’s constitution.

Since 2012, the country has been ruled by Georgian Dream, founded by billionaire Bidzina Ivanishvili. The party originally came into office supporting the deepening of ties with the West and the ongoing dilution of Russian influence, backing Georgia’s EU and Nato aspirations.

More recently, though, and particularly since 2022, Georgian Dream has been accused by opposition groups and many Westerns officials and analysts of adopting pro-Russia policies and rhetoric. In the aftermath of legislative elections in October 2024, which some opposition leaders continue to dismiss as rigged, Georgian Dream retained control of Parliament and passed a “foreign agents” law. Similar to Russian legislation, this requires organisations receiving overseas funding to register and is seen by some as a tool to suppress pro-Western civil society. The party also froze EU membership talks until 2028.

In the aftermath of Russia’s invasion of Ukraine in 2022, Georgia has ignored Western sanctions on Russia – welcoming wealthy Russian tourists, emigres and businesses while maintaining close commercial ties with its second-largest trading partner after Turkey. The leadership of Georgian Dream now advocates “balanced relations” with Russia – even though some Georgians and many overseas analysts view Abkhazia and South Ossetia, Moscow-backed separatist regions bordering Russia which between them account for 20pc of Georgia’s landmass, as “occupied territory”.

Since Russia invaded Ukraine in 2022, Georgia has ignored Western sanctions on Russia

In 2024, the US began sanctioning leading Georgian Dream officials for “undermining democracy”, “violating human rights laws” and “working for the benefit of the Russian Federation” – with the EU doing the same. The US has even sanctioned Georgian Dream founder Ivanishvili himself – who made his fortune in Russia and is widely seen as the country’s de facto leader – for “undermining Georgia’s democratic and Euro-Atlantic future for the benefit of Russia”.

Ivanishvili and many Georgian Dream supporters reject the “pro-Russian” label, insisting that the government still backs eventual EU membership, while framing its policies as defending Georgian sovereignty and traditional values against Western overreach. The party’s economic pragmatism – engaging with the West, while continue to benefit from Russian trade – certainly don’t equate to full strategic and ideological alignment with Moscow. While Georgia’s ruling party has become more illiberal and authoritarian over recent years, the “pro-Russia” label is probably an over-simplification.

The reality is that Georgian Dream is opportunistic – as rulers of this hugely strategic country have been for centuries. That is clear from the extent to which China – not traditionally a major actor in the Caucasus region – has lately been encouraged to expand its activities across Georgia.

Tbilisi clearly views China not only as a significant source of economic opportunity and investment, but also a means of gaining more leverage both the West and Russia. Beijing, in turn, sees Georgia as key to developing the so-called “Middle Corridor” transit route from the People’s Republic to Europe and other global markets – which serves China’s commercial and strategic goals.

Belt and Road

Georgia’s economic relations with China began to develop quickly from 2016 – after China announced Georgia’s inclusion in the Belt and Road Initiative (BRI).

Launched in 2013, BRI aims to stimulate China’s economy by creating new markets for its goods, services and surplus industrial capacity, particularly in infrastructure –not least heavy sectors like steel and cement. BRI is designed to enhance Beijing’s geopolitical influence by fostering economic ties across the world, positioning China as a central player – possibly the central player – in global trade and development.

BRI funds and builds critical infrastructure (ports, railways, roads) in partner countries, improving connectivity and trade routes from China – especially to Europe, Africa, and Asia. It seeks to strengthen ties with resource-rich nations in particular, while countering American and EU influence – by offering an alternative to Western-led financial institutions like the International Monetary Fund and World Bank, appealing to developing nations with fewer conditions on loans.

China has come to view Georgia as crucial to the Middle Corridor route – a variant of Beijing’s BRI that was previously seen as marginal but which, due to geopolitical events elsewhere, has rapidly been gaining favour in Beijing.

The Belt and Road Initiative funds and builds critical infrastructure in partner countries, improving connectivity and trade routes from China

The year after China announced Georgia’s inclusion in BRI, the two countries signed a free trade deal. Since then, China has overtaken the US to become Georgia’s third-biggest trading partner, after Turkey and Russia.

State visits to China by top Georgian elites have become commonplace in recent years. Following the announcement of a Sino-Georgian Strategic Partnership in 2023, then Prime Minister Irakli Garibashvili described China’s economic and political model – state-dominated and a very long way indeed from Western-style democracy – as “a new way and a new choice for humanity to achieve modernisation”.

Then Prime Minister Irakli Garibashvili visits Xi Jinping in July 2023

The 2023 partnership agreement declared a broad political alignment, with Tbilisi and Beijing ready to “strengthen coordination and collaboration in regional and international affairs.” Georgia’s new Prime Minister, Irakli Kobakhidze, in post since February 2024, is viewed as even more pro-China than his predecessor, stressing the building of ties between Georgian Dream and the Chinese Communist Party (CCP).

Georgia is now dotted with an ever increasing numbers of infrastructure projects under the supervision of Chinese construction firms, some of them extremely significant. The China Communications Construction Company (CCCC) – an engineering and construction multinational, majority-owned by the Chinese state – is heavily involved in several, including the construction of a new East-West Highway. With over 60pc of Georgia’s transit trade reliant on road transport, the 410-kilometre highway, stretching from the border with Azerbaijan to Georgia’s Black Sea coast, is of huge strategic importance.

State visits to China by top Georgian elites have become commonplace in recent years.

The East-West highway project, is partially funded by Western-oriented institutions – including the Asian Development Bank, World Bank and European Investment Bank. But construction of and control over this game-changing infrastructure development is now firmly in Chinese hands. Having previously been sanctioned by the US and World Bank in other countries, CCCC is now increasingly accused by external governments and analysts of poor workmanship and labour rights violations in Georgia. But the Chinese multinational continues to make significant progress –with the highway on course to be completed in 2026.

China’s involvement in the development of Georgia goes way beyond projects to build roads and bridges. The Chinese conglomerate Hualing Group has a controlling stake in Bank Republic – one of Georgia’s largest lenders – and also owns JSC Basis Bank, a Georgian commercial bank. Stung by Western sanctions, Georgia’s financial elites have been encouraging Chinese state-owned banks to enter their domestic market and in March 2025 the countries’ respective central banks signed a cooperation agreement to improve domestic banking services and payments infrastructure, signalling Tbilisi’s openness to Chinese financial institutions.

Beijing’s technological influence is also becoming deeply embedded, with internationally-sanctioned firms such as Huawei, Hikvision, and Dahua now playing a key role in Georgia’s digital transformation – against the express wishes of the US. Chinese tech is now running a broad range of public and private institutions, including ministries, city halls, customs controls, educational institutions and many other state- and non-state entities – raising security fears among outside observers and Western governments.

Beijing’s technological influence is becoming deeply embedded – against the express wishes of the US

Beijing has meanwhile introduced a scheme allowing Georgian citizens thirty days of visa-free travel in China. And only last month, in a significant shift in Georgia’s education policy, plans were announced to introduce Chinese as a second language in schools – part of a broader strategy to deepen commercial, cultural and scientific collaboration.

Northern Exposure, Maritime Fears

Beijing’s BRI was initially focussed on China’s traditional East-West trade route –sending goods overland from to Europe and onto global markets via the so-called Northern Corridor. Running through Kazakhstan, Russia and then Belarus into Poland, this long-standing route leverages Russia’s extensive rail network. While there are technical challenge, including changing rail gauges at the China-Kazakhstan and Belarus-Poland borders, the Northern Corridor route is quick and cost-effective, with freight transit times from China to Western Europe averaging 15-20 days.

Russia’s war in Ukraine and related sanctions have undermined the previously dominant rail-based “Northern Corridor” from China to the West

But geopolitical shifts have lately made the Northern Corridor less attractive. Russia’s war in Ukraine has seriously jeopardised Russia’s previously clear advantages as a transit country – given Western sanctions and possible complications accessing Ukraine’s commercial Black Sea ports even if a peace deal is struck. The route’s heavy reliance on Russia also also handed Moscow considerable leverage over China in recent years – which Beijing, despite growing collaboration with its vast neighbour, is instinctively keen to avoid.

The Southern Corridor is a much longer and more expensive maritime route – taking up to 60 days to transport goods from China to Europe and on to global markets. Rising geopolitical tensions and Houthi attacks on the Suez canal have again made this route more complex over recent years, leading to even longer sea passages and higher costs for both shipping fuel and maritime insurance. As tensions mount between Beijing and Washington, China is also keen to escape exposure to US naval dominance – given the genuine risk of escalating maritime conflict between America and the People’s Republic.

Both the Northern and Southern Corridors now suffer from stark geopolitical uncertainties

These emerging problems with both the Northern and Southern Corridors, resulting from stark geopolitical uncertainties, are why China is now looking to significantly upgrade the previously overlooked Middle Corridor – also known as the Trans-Caspian International Transport Route – across the Eurasian landmass. This is a multimodal transport route – comprising of roads, rail and shipping, stretching from China’s western border through Kazakhstan, across the Caspian Sea, and into Europe via Azerbaijan, Turkey and, crucially, Georgia.

Once a marginal option, the Middle Corridor route is actually faster than the alternatives, with freight from China taking just 10-15 days to reach Europe. It is now at the heart of Beijing’s BRI thinking, with the People’s Republic moving fast to build the infrastructure that will make this route as efficient as possible, speeding up transit times even more.

The Middle Corridor broadens China’s access to European markets and is also convenient for fast-growing North Africa and the Middle East. Plus, by reducing reliance on Russian transit routes, it weakens Moscow’s traditional dominance over Central Asia – another strategic goal for Beijing.

Over the last three years, China has been pouring huge amounts of resources into new ports, ports, railways, and logistical hubs across Eurasia – with the development of the Middle Corridor now reshaping the balance of power across an entire continent. The corridor includes two main transit paths – one through Georgia to the Black Sea with onward sea shipment to Europe, and another entirely overland via Georgia and Turkey into the EU. In both cases, Georgia is key.

Early in 2023, China’s ambassador to Tbilisi publicly endorsed the build-out of the Middle Corridor – with China and Georgia releasing a joint statement, noting the “development and strengthening of the Middle Corridor” as a key shared objective. Beijing then publicly backed, and said it would actively support, Georgia’s long-running efforts to establish a major commercial port on the Black Sea coast at Anaklia. Since then, the number of Chinese projects taking place across the country, and the Caucasus region more generally, has shot up.

The Middle Corridor includes two main transit paths – in both cases, Georgia is key

In November 2024, the wholly state-owned and state-controlled China Railway Container Transport Corporation because a formal partner in the Middle Corridor Multimodal Joint Venture, established by Kazakhstan, Azerbaijan, and Georgia. Beijing has also been working across Central Asia to build infrastructure and ease pinch points, making the Middle Corridor increasingly viable as a major trading route.

In March 2025, a historic border agreement was reached between Kyrgyzstan and Tajikistan – both of which are heavily indebted to China and are benefiting from BRI projects. A major example is the China-Kyrgyzstan-Uzbekistan (CKU) railway, construction of which began in December 2024 – which positions Kyrgyzstan as a key transit hub, with all the related economic gains. China has similarly exerted both diplomatic and commercial influence to help secure the finalisation of peace negotiations between Azerbaijan and Armenia – which, like the Kyrgyzstan-Tajikistan border agreement, also happened in March 2025 –  again, easing logistical and security concerns along the Middle Corridor.

Blockade On The Brain

How important could this “New Silk Road” trading route become? Comparative historical transit data relating to goods trade into and out of China is sparse and varies widely by source. But the Northern corridor has historically handled around 90pc of land-based freight between China and Europe. Since Putin’s invasion of Ukraine, though, that has fallen sharply – to an estimated 30-35pc, with the Middle Corridor, despite its logistical challenges and still fragmented infrastructure, already rapidly growing in importance.

The reality is that maritime shipping has traditionally dominated goods trade between China and Europe – primarily due to its capacity and cost-effectiveness for bulk and containerised goods when compared to land-based transit. The sea-bound Southern Corridor has accounted for around 80pc of East-West goods trade over recent decades, despite a passage time of at least 45 days, rather than 10-20 days using overland routes.

Having said that, Beijing is increasingly mindful about the security of seaborne goods transit – and about growing maritime tensions between the US and China. Along with well-publicised terrorism at the mouth of the Suez, the 900km Strait of Malacca linking the South China Sea to the Indian Ocean (between the Indonesian island of Sumatra and the Malay Peninsula) is another pinch-point that has seen increased attention over recent years due to strategic competition – not least between the US and China.

Carrying 25pc of global goods trade and over 80pc of China’s oil imports, such heavy reliance on this relatively narrow waterway (just 40km wide at its southern end, close to Singapore) leaves Beijing vulnerable to a potential naval blockade in the event of conflict. This is China’s “Malacca Dilemma,” a term coined by President Hu Jintao in 2003.

While no direct clashes have occurred, the ongoing presence of US, Chinese and Indian naval forces in the Straits of Malacca underscores its strategic importance. In October 2024, US and Australian navies conducted bilateral operations in the Strait to promote a “free and open Indo-Pacific”.

Hu Jintao coined the term “Malacca Dilemma”, when he was President in 2003

In December 2024, US lawmakers took the controversial step of voting to direct the Pentagon to produce a report on how best to impose a blockade restricting oil shipments to China – now the world’s largest crude importer – in a potential wartime scenario. This is a clear sign of growing diplomatic and strategic tension between the Washington and Beijing – tension which has, of course, been heightened by the recent US-China stand-off on tariffs.

The Congressional amendment passed late last year sought details on the suitability of key transit routes like the Malacca Strait for imposing an energy blockade on China, the US naval forces required – and how China might circumvent such a move using alternative routes. Beijing clearly does feel vulnerable to a potential US naval blockade – possibly imposed with assistance from India – prompting efforts to diversify trade and energy routes. These have included the construction and opening of overland trans-Siberian oil and gas pipelines between Russia and China in 2008 and 2019 respectively – but, more recently, the active development of the Middle Corridor through Kazakhstan and the Caucasus.

The extent of Beijing’s fears of a blockade are illustrated by the rapid growth over recent years of the Chinese Navy – which, for almost a decade now, has been the world’s largest by ship count, driven by China’s unmatched shipbuilding capacity. By my reckoning, China has commissioned 35 new naval vessels over the last three years (2022-24) – with a focus on modern surface combatants, submarines, and amphibious vessels. Over the same period, the US Navy, dealing with a significant maintenance backlog, has commissioned just 10 new vessels.

The Chinese Navy has grown rapidly – and is now the world’s largest by ship count

China claims sovereignty over most of the South China Sea - citing “historical rights”, in defiance of an international arbitration tribunal that rejected most of Beijing’s claims. This has put China at odds with several Southeast Asian neighbours, including US defence treaty ally The Philippines – which quite often complains about dramatic confrontations with Chinese maritime forces, accusing Beijing’s coast guards but also sometimes warships of aggressive and unsafe navigational manoeuvres.

In addition, recent Chinese military exercises – including “Strait Thunder-2025A” in early 2025 – have included blockade scenarios around Taiwan, yet another sign of escalating regional tensions. Contrary to near-universal international recognition of Taiwan’s independence, the People's Republic refuses, of course, to recognise its status as a sovereign state. Beijing officially considers Taiwan a province of China, arguing for reunification with the mainland, by force if necessary.

Any effort by Beijing to subjugate Taiwan would likely involve a naval blockade –given Taiwan’s heavy reliance on imported energy, not least liquified natural gas. That could, in turn, provoke a US-led counter-blockade of China in the Straits of Malacca and the South China Sea more generally – threatening China’s own energy imports and its ability to maintain vital export routes to the outside world.

During peace time, then, the maritime Southern Corridor is likely to remain the dominant form of transit for goods trade into and out of China. For non time-sensitive goods, the volume and cost-effectiveness of containerisation are simply too high. But as China becomes more powerful and geopolitical tensions continue to mount, not just between the US and China but potentially between Western Europe and Russia too, the drawbacks of both the sea-bound Southern Corridor and the rail-based trans-Siberian Northern Corridor will remain in stark focus.

Questions relating to the future of Taiwan are not going away

Taiwan is not only of deep political importance to China, but of immense commercial significance to the West – as manufacturer of well over half the world’s semi-conductors, vital across a whole range of tech, manufacturing, healthcare, and defence applications. Questions relating to the future of Taiwan are not going away.

Over the coming years, as China’s economic and military power grows, Beijing is likely to become increasingly impatient to fulfil its much-cherished “One China” policy by moving to annex Taiwan. And that significantly increases the scope for East-West tensions to explode into outright confrontation on the South China Sea.

For all these reasons, China is now placing a very high priority on developing The Middle Corridor too – not just as a way to develop closer links with resource-rich Central Asian nations, so as to counter Russian influence, but also to provide an additional hedge against the possibility of maritime blockades and even open naval conflict between China and the US.

Preferable to Poti, better than Batumi

Developing the Middle Corridor, of course, brings us back to Beijing’s ever-growing closeness to Tbilisi – and the now pressing need, from China’s perspective, for serious shipping capacity on Georgia’s Black Sea coast to make this transit route more cost-effective.

The largest port in Georgia is currently Poti, which handles 80pc of the country’s container traffic and is already a critical trade hub. But Poti has a natural depth of only about 9 meters, limiting it to smaller vessels with a capacity of around 1,500 TEU – or Twenty-Foot Equivalent Units, the standard unit of measurement for container cargo capacity, being the volume of a standard twenty-foot shipping container.

The seaside resort of Anaklia has huge economic and strategic potential, far out-stripping that of Poti and Batumi – Georgia’s two main existing ports

With its shallow depth and narrow entrance limiting Poti’s ability to handle really large container ships, Georgia’s largest port has an annual capacity of only around 600,000 TEUs. And even with a planned expansion to 1 million TEUs per annum, Poti has only limited commercial capacity and will never be suitable for major geopolitical roles, such as hosting large NATO vessels.

Georgia’s second port is Batumi, at the Southern end of the country’s Black Sea coast, close to Turkey. Batumi has a depth of up to 11 metres – also quite shallow – and is primarily focused on the transit of oil and petroleum products, mainly from Azerbaijan and Kazakhstan, with a container terminal capacity of just 200,000 TEUs annually. Batumi’s single railway link and higher freight costs compared to Poti further reduce its economic and strategic importance.

Anaklia – currently a tiny sea-side – is considered a superior site for a major port, both economically and strategically, than Poti and Batumi . There is a natural depth of around 20 meters, enough to accommodate large “Panamax” and “post-Panamax” vessels – capable of carrying up to 10,000 TEUs each. This would allow Anaklia to handle significantly larger cargo ships than existing Georgian ports, making it commercially competitive with major regional terminals in Turkey (Mersin) and Russia (Novorossisk).

Close to the separatist Moscow-backed region of Abkhazia, Anaklia’s strategic position also enhances Georgia’s alignment with Western interests. The port has enough natural depth to allow NATO vessels to dock, unlike Poti, strengthening Georgia’s national security – one reason it is of such strategic interest to the US and EU.

But Anaklia’s potentially pivotal role in helping to complete the Middle Corridor between Central Asia and Europe – and emerging strategic and geopolitical issues relating to the alternative Northern and Southern corridors – means the site has become of huge interest to Beijing too. The Middle Corridor, of course, bypasses Russian routes from China to Europe and on to global market, while avoiding potential US navy incursion and the increasingly vulnerable Suez canal.

Close to the Moscow-backed region of Abkhazia, Anaklia has enough depth to allow NATO vessels to dock

Already at near-capacity, Poti’s urban location restricts large-scale development. Batumi’s port is also constrained by its city-centre location, limiting expansion possibilities. Anaklia, in contrast, a small coastal resort with a population of less than 2,000, has lots of room to expand. That’s why plans have been drawn up to turn the site into major economic hub.

As a greenfield project, Anaklia could offers state-of-the-art infrastructure designed for modern shipping needs – which given its depth and location would be technically and financially feasible. The multitude of space would allow for phased development, as transit throughput grows.

A regional business centre with logistics and industrial parks, a financial hub, and social infrastructure like medical facilities and schools is also planned. While past attempts to deepen Poti have failed, its expansion is seen as a short-term solution – compared to the vast long-term potential of Anaklia.

Poti has an annual cargo capacity of around 7 million tonnes (including non-containerised trade), while Batumi’s maximum throughput is limited to around 3 million tonnes. But with Anaklia able to accommodate much larger ships than those used at Poti and Batumi, its potential is huge.

Even after only its first phase of development, Anaklia is forecast to be able to handle 20 million tonnes of cargo per annum – twice as much as Poti and Batumi combined. And some estimates suggest that, if the Middle Corridor really develops and all of Anaklia’s planned phases are fully implemented, there is scope to grow the port’s annual capacity to 100 million tonnes – which would make it the second-largest shipping terminal in the Black Sea region, after the Russian port of Novorossisk.

Georgia – On America’s Mind Too

Georgia’s strategic importance stems from its unique geographic, political, and economic position. Sat at the crossroads of Europe and Asia, it has long served as a bridge between the Black Sea and the Caspian Sea, a key transit route for trade and energy.

Already, as is well known, Georgia is a vital East-West oil and gas transit route. The Baku-Tbilisi-Ceyhan (BTC) pipeline, operational since 2005, transports crude oil from Azerbaijan’s Caspian fields through Georgia to Turkey’s Mediterranean port of Ceyhan, providing a non-Russian route to European and global markets.

The Baku-Supsa Pipeline (known as Western Route Export Pipeline or WREP) has since 1999 pumped crude, again from from Azerbaijan, to the Georgian port of Supsa, for onward shipment to Europe.

Georgia’s position as an energy corridor will continues to shape its economic and strategic importance

The Baku-Tbilisi-Erzurum (South Caucasus) pipeline delivers natural gas from Azerbaijan’s Shah Deniz field, through Georgia to Turkey, with connections to Europe via the Southern Gas Corridor. This, again, helps to diversify Western Europe’s gas supply away from Russian dominance.

So Georgia is already an energy security lynchpin for both Turkey and Western Europe, offering a stable alternative to routes through Russia or Iran, both of which face frequent sanctions and political instability. Georgia’s position as an energy corridor continues to shape its economic and strategic importance – and other longstanding pipeline proposals could yet come to fruition.

Georgia is already an energy security lynchpin for both Turkey and Western Europe

The Trans-Caspian Gas Pipeline (TCP) is another potential way for Western Europe to avoid Russian transit, shifting natural gas from Turkmenistan and possibly Kazakhstan to Europe, again via Georgia. Then there’s the Nabucco pipeline project, intended to transport natural gas from the Middle East and the Caspian region via Georgia to Europe via Turkey, Bulgaria, Romania, Hungary and Austria – which has been discussed for many years.

The construction of a deep-sea port at Anaklia, though, would transform Georgia from its current status as mainly an energy conduit into a significant player in the future of East-West goods trading too. While enhancing ties with China and Central Asia via Beijing’s BRI, a major high-capacity port on Georgia’s coast would also increase Tbilisi’s leverage as a counterbalance to Russia’s commercial influence across the Black Sea region.

During the 1960s, the Soviets explored the possibility of building a deep-water port at Anaklia. The idea resurfaced during Eduard Shevardnadze’s presidency of Georgia in the late 1990s – but didn’t progress due to multiple economic and political challenges. It was then resurrected in 2012, towards the end of Mikheil Saakashvili’s Presidency – and in 2016 Georgia’s TBC Bank and US-based Conti International had their proposal for the Anaklia Deep Sea Port project accepted by Georgia’s Ministry of Economy & Sustainable Development.

In 2020, though, with Georgian Dream in office, this US-led proposal was cancelled – after two of the Georgian partners were accused, and later found guilty, of money-laundering charges. Then, in 2022, the government announced plans to revive the project – and opened up a call for bids, saying that Tbilisi planned to hold a 51pc stake in the port.

In 2020, the US-led proposal to build the Anaklia deep-water port was cancelled

In May 2024, after intense diplomatic activity by Beijing and an escalation of Chinese-backed projects across Georgia, the Tbilisi government then awarded the contract to develop Anaklia to a consortium led by China’s CCCC – the multinational already masterminding the construction of Georgia’s East-West highway – with China Harbor Investment, China Road and Bridge Corporation and Qingdao Port International as subcontractors. The Georgian state company “Anaklia Deep Sea Port” was announced as 51pc shareholder, with the Chinese consortium holding 49pc – but undoubtedly dominating the construction and operation of the project.

It was reported that Anaklia was to be constructed based on Chinese cargo needs and was set to become a critical node in Beijing’s BRI. Tbilisi’s decision last May stirred controversy, with concerns raised by the US and Georgian opposition groups about China’s growing influence in Georgia and the Black Sea region more generally. But in August 2024, the project effectively began, with Belgian company Jan De Nul contracted to start the development of essential marine infrastructure work at the site – such as breakwaters and access channels.

Since Tbilisi awarded the Anaklia contract to China last May, though, the US and other Western partners have shown increasing interest in asserting their own influence over this emerging Eurasian trade route.

In November, the Washington-based World Bank issued a report titled “The Middle Trade and Transport Corridor”, highlighting priority measures that could assist Kazakhstan, Azerbaijan and Georgia in developing infrastructure linking them to Western Europe. The report estimated that the volume of goods transported along the Middle Corridor would reach 11 million tonnes by 2030, triple the level in 2021.

Since Tbilisi awarded the Anaklia contract to China last May, the US and other Western partners have shown increasing interest

And, in recent weeks, there have been very clear signs that pressure from the US is now putting the Georgian government’s plans to develop the Anaklia port in flux, with officials seemingly reconsidering the extent of China’s involvement.

In early May 2025, Georgia’s Economy Minister Levan Davitashvili made an official visit to Washington and, immediately afterwards, said the deadline for submitting proposals for investors in Anaklia actually expired only in April 2025 – with his ministry now set to assess those proposals “over the next month” before making a final decision.

“The Georgian state views Anaklia as critical infrastructure and state interests are guaranteed here,” Davitashvili told journalists after his meetings in Washington. “The ministry has very good proposals and we are ready for all alternatives”. Insisting that “the winner has not been identified”, the Georgian minister described China’s reported role as “a subject of speculation” and “misinformation”.

“We may have a private partner who may have a 49pc share,” said Davitashvili, casting doubt over an outcome, namely Chinese ownership of a 49pc stake in the Anaklia port project, which was understood to have been finalised in May 2024. “Depending on what the proposal will be, we will have a partner,” Davitashvili said, ever more cryptically. “But the port will be operational very quickly”.

Conclusion

My recent week in Tbilisi was largely about visiting my daughter Ailis, day trips from the capital and enjoying the local food and wine. But I ended up also having numerous conversations about this country’s role as a transit hub for global trade and energy routes – and the fast-developing commercial, diplomatic and strategic relations between Georgia and China.

Beijing’s interest in Georgia and the Caucasus region, traditionally somewhat limited, has soared over the last few years as a result of shifting geopolitical sands. Since 2016, when China included Georgia in its Belt and Road Initiative, Beijing has been planning and building infrastructure projects in and developing other links to Georgia. But more recently, collaboration between the two countries has become much more intense.

Putin’s 2022 invasion of Ukraine and resulting sanctions on Moscow have undermined the reliability of the overland Northern Corridor route for China’s goods exports to Europe, reliant as it is on Russia’s extensive rail network.

And growing tensions in both the Middle East and between the US and China similarly make the maritime Southern Corridor from the South China Sea to Europe and global markets more hazardous, reliant as it is on shipping lanes through the Straits of Malacca and the Suez Canal.

This leaves China vulnerable, both commercially and militarily - especially if Beijing decides to act on its long-standing “One China” policy, moving to annex Taiwan.

So, as global goods trading volumes increase, Georgia’s importance as an East-West transit route, which dates back to the age of The Silk Road, is coming into ever sharper focus. The geopolitical importance of this fascinating country is only going to increase.

In that regard, this When the Facts Change post has highlighted a little-noticed but pivotal ongoing power struggle over the future of what would be Georgia’s first deep-sea port at an obscure Black Sea resort called Anaklia – a facility of very considerable commercial, military and geopolitical significance. This is just the latest episode in the long-standing external battle for influence in Georgia – and related control of the increasingly important global trade routes that pass through this country.

And, as of the time of posting, the future of the Anaklia project – widely assumed to have been decided in Beijing’s favour, despite US objections – is now once again very much in the balance.

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