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Possible Consequences of Georgia-China Free Trade Agreement

The study showed that a free trade agreement between Georgia and China has great potential.
Georgia’s export to China would increase by 9% approximately, in the short-term period including significant growth ofwine exports (28.5%) and non-alcoholic drinks (36.7%).

On the other hand, imports from China would increaseby 1.7%.The study has crucial importance, as further negotiations between the two countries about the agreement willbe based on its results.
The comparative analysis of Georgia’s foreign trade and trade with China shows that a free trade agreement may increase export of goods and services in new directions as well.

It would also provide numerous opportunities to increase the trade flow in services, in terms of transport andlogistics, and tourism.Growth in Chinese investments, including in infrastructure projects that will facilitate an increase in Asia-Europe trade flow and in the medical and financial sectors, under the framework of the new policy of theChinese government would be expected.

In addition to increased investments, free trade agreement will enhance investment attractiveness of Georgiain general. Considering Georgia’s trade policy liberalization, it will not affect local producers and the growth ofimport. Taking into account all the effects, we can say that trade liberalization with China will contribute to thedevelopment of Georgia’s economy, explained Lasha Chochua, Economist at PMC RC.

The study was prepared by PMC Research Center with the experts of China’s University of International Business and Economics (UIBE) and in collaboration with the Ministry of Economy and SustainableDevelopment of Georgia and Ministry of Commerce of the People’s Republic of China.