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Georgian PM hopes to boost co-op with China

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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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