NGO warns of Chinese financial influence over Georgia due to new deal

The civil society group Civic Idea on Tuesday raised concerns over Georgia’s financial independence following a recent agreement between the National Bank of Georgia and the Central Bank of China.

The memorandum, signed on March 26, aims to enhance cooperation in monetary policy, financial technologies, payment systems, and the development of the securities market. However, the NGO warns that the deal could deepen Georgia’s economic reliance on China.

The NGO claimed the agreement exposed Georgia to the risk of “debt-for-money diplomacy,” a term referring to the strategic use of financial agreements to exert political influence. The organization’s analysis suggested that the Georgian government’s pivot towards China, marked by increased economic cooperation and the rejection of European Union financial assistance, may lead to a scenario where Chinese financial institutions gain substantial leverage over the country.

Critics highlighted the risks associated with such partnerships, including financial opacity, political pressure, and potential corruption. A particular concern was the possibility of “cross-default” clauses, which could allow Chinese lenders to exert significant economic and political influence should Georgia face financial difficulties.