Risks Of Chinese Outward Foreign Direct Investment To Georgia

The “Belt and Road” initiative is a new policy of opening up to the outside world in the new era.This is the road of win-win cooperation to promote common development and achieve common prosperity,and the road of peace and friendship to enhance understanding,trust and all-round exchanges.The Caucasus region is an important area of China’s “Belt and Road” initiative.The region is a hot spot for Chinese Foreign Direct Investment（COFDI）and the investment volume is increasing year by year.Chinese companies conform to the trend of the times and expand the investment scale and investment area of Georgia.Therefore,it is a great practical significance to study COFDI to Georgia.From the political,economic,cultural and other aspects,this paper selects 13 risk indicators,calculates the risks and puts forward suggestions for COFDI in Georgia.The main conclusions of this paper are as follows:Firstly,SWOT analysis of COFDI environment in Georgia.The strengths include: China’s policy support for enterprises to cooperate with a member state of the “Belt and Road”,an economic strength of Chinese enterprises and rich foreign exchange reserves of China.Weaknesses include: lack of clear understanding of Georgia’s policy and system,lack of Chinese professionals in overseas investment,lack of experience of Chinese companies in overseas investment,etc.At the same time,there are great opportunities and threats for both sides.The opportunities are:completion of the construction of China-Georgia Free Trade Zone;Georgia has superior geographical location,rich natural resources and good business environment.The threats include: complicated geopolitical relations,tense domestic political situation and fierce competition in the international market.Secondly,the two most important risks of Chinese investment in Georgia are political and economic investment risks.The first five influencing factors are country national security risk,inflation risk,domestic political situation risk,cultural and governance system and policy change risks.Therefore,it is necessary for Chinese enterprises to analyze the political and economic risks of their investments in Georgia and formulate feasible measures to avoid them,so as to reduce the risk of loss investment.Thirdly,based on the risks of COFDI in Georgia,the paper puts forward some preventive measures from the political,economic,cultural and other aspects.