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EDB: Azerbaijan becomes China’s largest investment destination in the region

29 December 2025 11:37 (UTC +04:00)

China's foreign direct investment (FDI) portfolio in the South Caucasus region has increased 2.5 times over the past decade, reaching 690 million US dollars in the first half of 2025, APA-Economics reports, citing the Eurasian Development Bank (EDB).

Approximately 60% of these investments are directed to Azerbaijan, and 40% to Georgia.

According to the report, the main part of Chinese investments in the South Caucasus is divided between Azerbaijan and Georgia. Azerbaijan's leading position in the portfolio is maintained, and the country remains the main destination for Chinese capital in the region.

According to the EDB's assessment, the processing industry and energy stand out as priority areas in the sectoral distribution of Chinese investments. This structure indicates that China is gradually moving away from the extraction-oriented investment model in the South Caucasus.

According to the EDB, while global foreign direct investment flows decreased by 11% in 2024, Chinese investments continued to grow in the Eurasian region. Over the past 18 months, Chinese capital has increased by $7.4 billion in the region, exceeding $66 billion.

Although the South Caucasus has a smaller share in this fund compared to Central Asia and the Eurasian Economic Union in terms of volume, it stands out with its stable and structurally high-quality investment portfolio.

Note that China's total FDI portfolio in the Eurasian region reached $66.1 billion by mid-2025, which is an 80% increase over the past decade. While China used to invest mainly in extractive industry projects, the processing industry and energy are now becoming new growth drivers.