Foreign direct investment in Georgia fell sharply in the second quarter of 2026, while China surged to become the country’s largest investor, highlighting Tbilisi’s deepening economic ties with Beijing as relations with the West remain strained.
According to preliminary data from Georgia’s National Statistics Office, Geostat, foreign direct investment (FDI) dropped 23.2 per cent year on year between April and June, falling to $468.8 million from $610.6 million in the same period last year.
The decline in reinvested earnings - profits put back into businesses already operating in Georgia - was the main factor behind the fall.
Despite the overall downturn, China’s role in Georgia’s economy shifted dramatically. A year ago, Chinese investment in the country was negative, but in the second quarter of 2026 it surged to $219.5 million.
That represented nearly half of all FDI entering Georgia and made China the country’s largest foreign investor for the first time.
The shift is widely linked to one major transaction: the acquisition of Liberty Bank by Basisbank, owned by China’s Hualing Group, in a deal worth around $250 million. The purchase marks one of the most significant Chinese investments in Georgia’s financial sector to date.
The United Kingdom ranked second, followed by the United Arab Emirates in third place. Together, the three countries accounted for more than 80 per cent of all foreign investment in Georgia during the quarter.
Financial and insurance activities attracted the largest share of FDI by sector, followed by real estate and manufacturing.
The pattern reflects a longer-term trend in Georgia’s economy, with finance and property remaining among the most attractive sectors for foreign capital.
The investment surge comes amid closer relations between Georgia and China. The two countries signed a strategic partnership in 2023, followed by the introduction of visa-free travel and an expansion of trade ties.
In June 2026, Tbilisi and Beijing further upgraded their relationship by announcing a “comprehensive strategic partnership.”
China’s growing economic footprint stands in sharp contrast to Georgia’s stalled relationship with the European Union.
Brussels has said the political direction taken by the Georgian government has effectively frozen the country’s EU accession process, while the ruling Georgian Dream party has stated that it will not pursue EU membership talks until 2028.
With Western economic engagement cooling, China’s expanding investment presence could be filling a growing gap in Georgia’s foreign capital landscape - a shift that may help shape the country’s economic direction in the months ahead.
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