China’s foreign direct investment (FDI) portfolio in the South Caucasus region has increased 2.5 times in the last decade, reaching 690 million US dollars in the first half of 2025. Approximately 60% of these investments were directed to Azerbaijan, and 40% to Georgia.
Elchi.az reports that this was stated by the Eurasian Development Bank (EDB).
According to the report, the main part of Chinese investments in the South Caucasus is divided between Azerbaijan and Georgia. Azerbaijan’s dominant position is maintained in the portfolio, and the country remains the main destination for Chinese capital in the region.
According to the EDB’s assessment, the manufacturing industry and energy stand out as priority areas in the sectoral distribution of Chinese investments. This structure shows that China is gradually moving away from the extraction-oriented investment model in the South Caucasus.
According to the EDB, while global foreign direct investment flows decreased by 11% in 2024, Chinese investments continued to increase in the Eurasian region. Over the past 18 months, Chinese capital in the region has increased by 7.4 billion US dollars, exceeding 66 billion US dollars.
Against this background, although the South Caucasus has a smaller share in terms of volume compared to Central Asia and the Eurasian Economic Union countries, it stands out with a stable and structurally high-quality investment portfolio.
It should be reminded that China’s total FDI portfolio in the Eurasian region reached 66.1 billion US dollars by mid-2025, which is an 80% increase in the last decade. Previously, China mainly invested in extractive industry projects, but now the manufacturing industry and energy are becoming new growth drivers.