China’s Investment Amid Geopolitical Pivot in South Caucasus

China has moved to strengthen its role in the South Caucasus with a series of new agreements and investments that reflect Beijing’s long term strategy for the region. The shift comes at a moment when traditional power balances are being reshaped and governments are seeking alternative partners for growth.

Azerbaijan emerged as the central partner in April when President Ilham Aliyev visited Beijing. The visit concluded with the signing of a Comprehensive Strategic Partnership which represents the highest level of diplomatic ties in China’s system. Officials confirmed that more than 800 million dollars in Chinese capital is already invested in Azerbaijan, covering energy projects, digital infrastructure and logistics. New contracts signed this spring add large scale solar and wind power developments to the agenda.

Georgia has positioned itself as a hub for China’s expanding Middle Corridor initiative. The transit route, linking China to Europe through Central Asia and the Caspian Sea, gained importance after disruptions in Russia and along maritime lanes. In Georgia, financing from the Asian Infrastructure Investment Bank was directed to the Batumi bypass and additional works at Poti and Batumi ports. Authorities noted that expanded rail and port capacity will reduce bottlenecks and attract higher cargo volumes through the country.

Armenia has received less direct investment but reported a 34 percent increase in trade turnover with China in 2024, bringing total trade to over two billion dollars. Chinese companies have expressed interest in technology services, mining and industrial ventures. Officials in Yerevan said discussions are ongoing to expand cooperation in areas that complement Armenia’s export potential.

The overall pattern highlights China’s growing influence in the South Caucasus through transport corridors, renewable energy development and infrastructure upgrades. Governments in Baku, Tbilisi and Yerevan are using these ties to diversify their economic relations while adjusting to broader geopolitical shifts.

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