CEFC China Signs Two Cooperation Agreements with the Government of Georgia to help develop an innovative trade model in the “Silk Road Common Market Zone”

During the Belt and Road Forum for International Cooperation held in Beijing on 14 May 2017, CEFC China Energy Company Limited signed two important cooperation agreements with the Government of Georgia. Zang Jianjun, Executive Director of CEFC China, signed a Memorandum of Understanding on the Joint Establishment of the Georgian Development Bank and a Strategic Cooperation Framework Agreement on the Joint Establishment of the Georgian National Construction Fund with Dimitri Kumsishvili, Georgia’s First Deputy Prime Minister and Minister of Finance, and David Saganelidze, CEO of the JSC Partnership Fund, respectively. This will help to promote strategic cooperation between CEFC China and the Government of Georgia, as well as to build the planned “Silk Road Common Market Zone”, and accelerate the development of an innovative Belt and Road trade model.

According to these agreements, CEFC China will work with the Government of Georgia to set up the Georgian Development Bank. CEFC China will take a controlling stake in the new bank and play a major role in its operation. The bank will specialize in projects designated by the two governments, with a focus on RMB-denominated financial services and cross-border RMB settlement services, in order to promote bilateral economic and financial cooperation. The company will also cooperate with the Georgian National Sovereign Fund to establish the Georgian Construction Fund, in which CEFC China will be the controlling shareholder, and actively engage in its management. The fund will focus its investment on financial services for projects to develop Georgia’s economy and national strength, including roads, electric power, telecommunications and other major infrastructure projects, using China’s competitive resources to promote bilateral production capacity cooperation.

The signing ceremony was part of the Belt and Road Forum for International Cooperation, and is also a positive outcome ofCEFC China’s active involvement in the Belt and RoadInitiative, injecting a new impetus into economic and trade cooperation between China and Georgia. Located in the heart of the Silk Road Economic Belt, Georgia serves as an important link connecting the two major economic zones of the Asia-Pacific region and Europe. The Belt and Road Initiative is well suited to Georgia’s economic and social development plan, with potential for mutual benefit between China and Georgia in many areas. China has long been working to promote mutual political trust and economic cooperation with Georgia. Georgia strongly supports China’s Belt and Road Initiative and is striving to build a new silk road overland. Since 2015, the two countries have signed a Cooperation Memorandum on the construction of the Silk Road Economic Belt and have completed substantive negotiations on a bilateral free trade agreement, opening a new window of opportunity to seek closer cooperation for joint development.

In recent years, CEFC China has grasped the opportunity of the Belt and Road Initiative to take the lead in setting up projects in Silk Road countries, to expand energy and economic cooperation. Given the consensus on the great potential of the Silk Road Economic Belt for China and Georgia, CEFC China and the Government of Georgia have established comprehensive strategic cooperation in a number of fields including infrastructure, manufacturing, energy, tourism and culture, with a focus on financial cooperation and the construction of the Common Market Zone. The signing of the two strategic cooperation framework agreements represents the implementation of cooperative efforts between Georgia and CEFC China on the Belt and Road Initiative and lays a solid foundation for jointly establishing the Common Market Zone, which combines the features of pilot free trade zones and bonded zones.

Based on the experience of other industrial parks and free trade zones, the Common Market Zone will aim to deliver regional commodity trading, export processing, technical cooperation, warehousing and logistics, and integrated cross-border financial services. It will actively promote the export of advanced technologies, production capacity, and products from China to countries in the Eurasian region, and build a new Eurasian Land Bridge and an economic corridor between China, Central Asia and Western Asia. According to the cooperation plan, the Common Market Zone will be located in Poti, a port city on the coast of the Black Sea. Proximity to the sea port will give the Common Market Zone access to the huge European and Central Asian markets.

The Common Market Zone aims to act as a hub for the regions around the Black Sea and the Caspian Sea, for free trade across Europe and Asia, offshore services, financial services, manufacturing, and logistics; and to be the platform through which China’s commodities can enter the European and Central Asian markets, as well as collaboration projects and products to improve production capacity. To achieve this goal, the Common Market Zone will focus on developing financial services through the introduction and expansion of industrial projects, based on the implementation of key policies.

CEFC China is committed to developing the Common Market Zone, a new model of economic and trade cooperation, as a bridge for policy coordination that promotes the implementation of the Belt and Road Initiative in Georgia, a hub forfacilities connectivity, a platform for trade, a windowfor financial integration, a symbol of the national bond between the people of China and Georgia, and a demonstration project for cooperation in five areas (policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bond) in countries along the Silk Road.

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