Experts say Georgia’s decision to partner with a sanctioned Chinese company on the Anaklia Deep Sea Port project will completely reshape regional politics in the years to come. Anaklia, strategically located on the ancient trade route, represents a critical transport node on the New Silk Road between China and Europe. The location and the technical and infrastructural capabilities of the port of Anaklia will be major factors in attracting cargo. In parallel, ongoing infrastructure developments in the region in support of the One Belt One Road initiative are an important indicator of the future increase in trade between China and Europe.
Over the past 20 years, the name China Communications Construction Company (CCCC) has often been associated with cases of alleged corruption. From Equatorial Guinea to Tanzania, Malaysia to the Philippines, the Chinese state-owned company has fended off allegations of corruption, fraud, anti-competitive practices, and predatory financing, which have seen it previously excluded by the World Bank and currently blacklisted by the United States.
A Chinese consortium — China Communications construction company Ltd, together with China harbor investment — was selected as a private investor for the construction of the new deep-water port of Anaklia.
According to the Georgian government, however, those sanctions simply don’t exist. “It’s a lie, international sanctions do not apply to this company,” the Ministry of the Economy has claimed. “We believe these unfounded allegations are part of a politicised campaign aimed at hindering the Anaklia port project.”
Georgia is situated in a strategic location on the “One Belt One Road” route, positioned along the shortest route between China and Europe, acting as a gateway for cargo to enter into the landlocked Central Asian and Caucasian regions. Anaklia Port unlocks a primary market (Georgia, Azerbaijan, Armenia) of 17 million people from the Caucasus region and another 147 million people from landlocked countries in Central Asia (Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan and Tajikistan) and Northern Iran.
Anaklia, strategically located on the ancient trade route, represents a critical transport node on the New Silk Road between China and Europe. The location and the technical and infrastructural capabilities of the port of Anaklia will be major factors in attracting cargo. In parallel, ongoing infrastructure developments in the region in support of the One Belt One Road initiative are an important indicator of the future increase in trade between China and Europe.
Aimed at drastically expanding Georgia’s role as a transit point along the so-called ‘Middle Corridor’ trade route between Europe and Asia, plans to build Georgia’s first deep-water port on the Black Sea have a long and chequered history. But experts say the decision to partner with CCCC on the US$2.5 billion project represents the initiative’s most troubling development to date.
"The CCCC, the largest builder of the Belt and Road, is besieged by allegations of fraud, corruption and environmental damage," Bloomberg said.
For Ted Jonas, an international business and environmental defence lawyer based in the Georgian capital of Tbilisi, who was previously involved in the port project, it was little coincidence the announcement fell on 29 May, just one day after the government faced down widespread international condemnation to pass a Kremlin-style law on ‘foreign influence‘.
Decried as punitive and anti-democratic for targeting independent media and government-critical NGOs, these measures have effectively torched the South Caucasian country’s long-standing relations with the Euro-Atlantic community, representing as they have a climax to the staunch anti-Western rhetoric from Georgian officials that has mounted since Russia’s full-scale invasion of Ukraine.
China’s ongoing support for the Putin regime amid the war has proven a source of concern for the US and the EU, as Chinese markets continue to provide a critical lifeline for Russia’s sanctioned economy.
Jonas says Georgia’s recent port deal with CCCC signals a decision to pick a side in the conflict by a country that had otherwise, historically, placed a heavy premium on “strategic ambiguity” since its own disastrous war with Moscow in 2008.
“The port deal is a concrete representation of [the Georgian government’s] anti-Western turn,” Jonas explains.
The foreign agent’s law is relatively abstract as it exists only on paper for now, but the port is a physical project – it will literally be like a new iron curtain, because there can now be no Western involvement in it at all - Ted Jonas, defence lawyer.
The Anaklia Deep Water Port initiative was first floated in 2012 by Georgia’s pro-Western former President Mikheil Saakashvili, just months before his United National Movement government was ousted at the polls by Georgian Dream, the current ruling party.
Georgian Dream had been founded earlier that year by billionaire businessman Bidzina Ivanishvili, who made his fortune in Moscow during the privatisation frenzy of the 1990s, and who has lately faced growing calls to be targeted with international sanctions for his control over domestic public life and longstanding ties to powerful Russian interests.
Georgia has increasingly turned to China for infrastructure projects, with one study by the Tbilisi-based Civic Initiative for Democratic and Euro-Atlantic Choice saying that since 2021, every infrastructure project worth more than $100 million has involved Chinese companies.
In 2017, a consortium was set up between Georgia’s TBC Bank and US-based construction firm Conti International to initiate and oversee initial research and development for the deep water port project.
Two years later, then-US Secretary of State Mike Pompeo was praising the initiative for its promise to “increase Georgia’s relations with free economies” and, in words that have since proven ironic, to “prevent Georgia from being influenced by Russian and Chinese economies”.
But by that point the initiative had already begun to flounder, after TBC Bank founders Mamuka Kharazadze and Badri Japaridze were accused of money laundering by the Georgian government. Both men have denied the allegations, with Kharazadze claiming they were motivated by a desire to sabotage the port initiative owing to conflicts in his personal relationship with oligarch Ivanishvili.
As a result of the charges, Conti International pulled out of the consortium, with the Georgian government winding down and eventually cancelling the project in 2020.
Rumours abounded that the Kremlin pressured Georgian Dream to put an end to the initiative, wary as Moscow was of US interests so close to its own port of Novorossiysk, some 600 km northwest of Anaklia.
Georgia has increasingly turned to China for infrastructure projects, with one study by the Tbilisi-based Civic Initiative for Democratic and Euro-Atlantic Choice saying that since 2021, every infrastructure project worth more than $100 million has involved Chinese companies.
When war in Ukraine broke out in February 2022, a swift and significant decline in freight through Novorissiysk was keenly felt by Azerbaijan and Central Asian states like Kazakhstan and Uzbekistan. Amid the flocking to Georgia of concerned diplomats and officials eager to find a solution to the bottleneck, talk soon began to spread of reviving the ditched initiative.
Though the names of the companies involved in the tender process remained unknown until the May 29 announcement, there were already signs of Chinese interest in the project.
In September 2023, the Chinese Ambassador to Georgia Zhou Qian had emphasised the importance of Anaklia for growing trade demand along the Middle Corridor, in comments that came just months after then-Prime Minister Garibashvili had upgraded Georgia’s relations with China to a “strategic partnership” during a diplomatic trip to Chengdu.
Lea Thome, an international security scholar with the Wilson Centre, explains that while many Western firms are subject to certain institutional constraints like workforce regulations, reputational risk and a fear of loss on investment, Chinese state entities are seldom subject to the same restrictions.
In practice, firms like CCCC are therefore able to turn development projects around at great speed, meaning that if all goes ahead as planned, the first stages of the Anaklia port initiative could be completed within the next three years.
“It will have immense consequences for the region, promising to bring in more Chinese companies and more Chinese investment,” Thome says. “The Anaklia initiative was originally oriented toward the West, but with it now being known as a Chinese project part-owned by a sanctioned Chinese company, I think that will really shift the tone of the port, and how heavily it will be utilised by other countries.”
Jonas clarifies there’s no reason Western goods shouldn’t transit through a Chinese port, or that goods from China shouldn’t similarly go out from Anaklia into Western markets.
The concern, shared by many critics of the initiative, rests on the lack of scope for integrating Western services into the port, and the advantages this will afford not only Chinese companies but also, crucially, their customers in this corner of the Black Sea.
“Because of the sanctions in place, there will be no Western financing or investment, there will be, in effect, no Western content to it at all,” Jonas explains. “Western countries cannot sell services to this company that’s going to build the port, so it’s an absolute block on any real involvement – and if the Russians had a set of conditions they needed in order to be okay with this project, you can bet that was on the checklist.”
CCCC Company is owned by the Chinese Communist Party, number one financier of the Russian military - US Ambassador to Georgia on Anaklia Port
The majority of the CCCC company that the government awarded a contract to (for the Anaklia project) is owned by the Chinese Communist Party and the Chinese Communist Party is the number one financier of the Russian military today, - US Ambassador to Georgia Robin Dunnigan said in an exclusive interview given to InterPressNews.
According to her, there are also questions about the quality and standards of the company.
“On Anaklia, the majority of the CCCC company that the government awarded a contract to is owned by the Chinese Communist Party and the company is known to be affiliated with the Chinese military. The Chinese Communist Party is the number one financier of the Russian military today. So one question is - why deepen an economic tie with the party that is financing your occupier? Because the Russian military is being financed by the Chinese Communist Party. That's one question. Then there's just a question about the quality and standards of the company in question. So CCCC does not have a good reputation globally. In 2009, the World Bank barred the bank from providing financing to infrastructure projects done by this company. Recently, the company built a port in Sri Lanka. There's a lot of controversy around this port. I don't know if you've read about it. But ultimately, the Chinese government was able to secure a 99 year lease on Sri Lankan soil and its ships, military ships, vessels can come in and out. So there's a lot of controversy about Sri Lanka giving up some of its sovereignty in a key critical infrastructure. The United States Treasury has determined that this company is a company that is on a list of companies that have deep ties with the Communist Party's military. So there are a lot of concerns about Anaklia, of course, it is a sovereign decision, but I'm just reiterating some of the concerns that are seen globally about this particular company”, said the Ambassador.
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