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Georgian PM hopes to boost cooperation with China

Georgia Materials 28 October 2010 08:18 (UTC +04:00)
Georgian Prime Minister Nikoloz Gilauri says he hopes that cooperation between Georgia and China will be further boosted to the benefit of both countries.
Georgian PM hopes to boost cooperation with China

Georgian Prime Minister Nikoloz Gilauri says he hopes that cooperation between Georgia and China will be further boosted to the benefit of both countries.

Gilauri made the remarks in an interview with Xinhua on the eve of his visit to China and India.

The Georgian prime minister's entourage includes some Georgian businessmen from the energy and tourism sectors. He is visiting China for the National Pavilion Day of Georgia at the Shanghai World Expo on Thursday.

Georgia and China can have closer cooperation in such spheres as energy, tourism, free industrial zones and port facilities, Gilauri said.

On the domestic economic situation, Gilauri said Georgia has already been out of recession.

"In the first six months of this year, we had a plus 6.5-percent growth," he said. "On average for the whole of 2010, we predict a growth rate of somewhere between 5 and 6 percent. We are expecting the same growth rate for 2011."

"Starting 2012, Georgia will be able to grow by 8 percent to 10 percent," he added.

In 2009, the Georgian economy suffered a 3.9-percent contraction, according to Gilauri.

Georgia witnessed fast development between 2004 and 2007 when the country recorded an average annual growth rate of 9.8 percent.

"The good thing for us is our economy is growing in not only one direction," Gilauri told Xinhua. "We have growth in exports...we have growth in tourism...we have growth in the financial sector with record high deposits; and we have growth in the real estate sector."

Gilauri, who worked in the energy sector before becoming prime minister in February 2009, places high hopes on China for tapping Georgia's hydropower potential.

"We have developed new regulations that will make hydropower development in Georgia very profitable," he said.

"What we are offering to potential investors is that there is very high demand for electricity in Turkey in summer because of the tourism season and the use of air conditioning."

Gilauri described neighboring Turkey as the world's number two in terms of rising demand for electricity and as a country with one of the highest tariffs for power supplies.

High-voltage power transmission lines are being established to facilitate electricity exports from Georgia to Turkey.

Gilauri said Georgia could also serve as a platform where Chinese businessmen can produce and assemble goods for export to such countries as Turkey, Ukraine and Belarus.

"For China, we could be useful as a kind of gateway to Europe and gateway to this part of the world," he added.

Gilauri envisages a free industrial zone in Georgia for foreign investors to manufacture their goods with a potential for exports to Europe, as Georgia enjoys a short transit route.

"This could be of interest to the Chinese business people," he said.

Speaking of further development of bilateral relations, Gilauri said legal frameworks in the form of inter-governmental agreements in the fields of double taxation and investment protection as well as business forums would certainly help.

On the issue of decreasing foreign direct investment (FDI), he said that in 2009 and this year, Georgia saw financial inflows from from international financial institutions, like the Asian Development Bank (ADB), the World Bank, the International Monetary Fund, and the European Bank for Reconstruction and Development (EBRD).

"Foreign direct investment is down but we have money from ADB and EBRD," said Gilauri. "The objective for me as prime minister is to bring the level of foreign direct investment back to that of of 2007."

"We are seeing the coming back to Georgia of foreign investors who see there is quite big support from international financial institutions," he said. "This gives confidence to the private sector as well as to investors."

He also said he sees China as a leader in new technologies, economic development and innovations.

The Georgian prime minister hoped China-Georgia relations will develop further in both economic and political areas, saying there is much potential for Georgia's economy and business people to learn from China.

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