04.10.2014 Author: Mark Goleman

Mongolia and China: Segue to Comprehensive Strategic Relations

NEO Collage 97The People’s Republic of China came into being on 1 October, 1949. On 8 October, Mongolia became one of the first countries to recognize the PRC and establish diplomatic relations with it. And up until almost the second half of the 1960s, relations between the two countries developed quite successfully. During that time frame, China provided Mongolia much financial and technical aid and workforce assistance. But in the second half of the ’60s and ’70s, the relationship worsened as a result of the confrontation between the Soviet Union and China, during which Mongolia, of course, sided with the Soviet Union. But in the late ’70s and early ’80s, a rapprochement began. After the signing of a new treaty of friendship and cooperation (the first such agreement was signed in 1960) the two countries proceeded from cordial neighborly relations with each other to a strategic partnership that began in 2011.

Economic ties are being cultivated with particular fervor. By the end of the 1990s, China had secured its place as the main trading partner and investor, and volumes of bilateral trade and investment have grown from year to year. In 2006, Chinese investment amounted to $456 million. In 2014, the figure increased to $2.3 billion, almost half of all foreign investment in Mongolia. Meanwhile, trade volume rose from $524 million in 2002 to $6.6 billion in 2013. At present, 7,000 businesses in all sectors of Mongolia’s economy operate with capital provided by China.

These data clearly show how much is riding on Mongolia’s further cultivation of strategic partnerships with its southern neighbor, with whom it shares a border stretching 4,710 kilometers.

In light of that, Chinese President Xi Jinping’s visit on 21-22 August was a major milestone. It was the first time in 11 years that such a high-ranking dignitary from China had paid an official visit to Mongolia. Mongolia had pinned high hopes on the visit, as its president, Tsakhiagiin Elbegdorj, expressed in an exclusive interview with more than a dozen leading Chinese media outlets in Ulaanbaatar on 15 August.

The signature achievement was a declaration proclaiming the development of a comprehensive strategic relationship. The declaration sprang from extensive face-to-face negotiations between the two leaders.

It is noteworthy that first and foremost, the declaration lays out the principles on which Mongolian-Chinese relations are to be based: mutual respect for sovereignty, independence, the self-rule and territorial integrity of each other, nonintervention in each other’s domestic affairs, peaceful coexistence, coequal and mutually beneficial cooperation, and mutual respect for the path chosen by each other.

Speaking at a press conference at the end of the visit, Elbegdorj focused on the following provisions of the declaration: “The parties agreed not to engage in actions that are detrimental to the sovereignty, security and territorial integrity of the other country, not to enter into any alliances or coalitions directed against either of the parties, and not to allow any third country, organization or group to conduct such activities in their country.”

For his part, Xi salved the Mongolians’ collective psyche, reassuring them that, “China will always respect the sovereignty, independence and territorial integrity of Mongolia and its choice of development path. China considers cooperation a priority of its foreign policy with Mongolia.”

The inclusion of those provisions in the declaration and Xi’s assurances are significant because they are intended to assuage some of Mongolia’s concerns. Elbegdorj expressly said so to the Chinese journalists: “In recent years, in the Chinese news media and especially on the Internet, many articles have appeared that call Mongolian sovereignty into question and lie about historical events. And this has happened despite the fact that the Internet in China is strictly controlled.”

The declaration establishes a basis for Mongolian-Chinese relations to become a comprehensive partnership.

The agreements reached are truly all-encompassing. In all, 26 intergovernmental and interdepartmental agreements and eight contracts and agreements between business entities were signed.

In the policy and security realms, the parties agreed to establish a permanent exchange program between their legislatures and a vehicle for strategic talks between their foreign ministries. They agreed to keep up their efforts at defense cooperation through bilateral consultation and to jointly defend their common interests in areas of defense and security.

They intend to broaden their interaction in the UN, the Shanghai Cooperation Organization, and the Conference on Interaction and Confidence-building Measures in Asia (CICMA). China is backing some Mongolian undertakings: Ulaanbaatar’s dialogue on security issues in Northeast Asia; the convocation of a summit involving Russia, Mongolia and China; and Mongolia’s entry into the Organization of Asia-Pacific Economic Cooperation. Mongolia is supporting China’s efforts to resume six-party talks on North Korea.

Regarding commercial and economic relations, the parties aim to boost trade volume to $10 billion by 2020 and promote both traditional and new areas of cooperation, such as coal gasification and mineral production. They agreed to work in tandem to develop new energy sources and build gas power plants. The cooperation agreement also touches on electricity exports to China, nature conservation, agricultural and livestock production, and so forth.

A long-anticipated breakthrough was reached on freight delivery to raise the volume to 100 million tons annually by 2020. The agreement calls for the use of Chinese seaports and financing from China for construction of new narrow-gauge railway lines.

The two countries also agreed to study the potential for creating a cross-border zone of free trade and economic cooperation along the border around the towns of Erenhot and Zamiin-Uud. Mongolia offered to supply goods to the Chinese market on favorable terms, including tax-free agricultural products in unrestricted quantities.

In the areas of infrastructure and mining, a medium-range trade and economic cooperation program was worked out and will be instituted by bodies such as the Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation and the Cooperation Council.

In the cultural field, China committed to giving out 1,000 scholarships a year to Mongolian university students, train 500 Mongolian troops and invite 250 members of the news media to China. The number of Chinese tourists is expected to grow from 100,000 to 150,000.

We can therefore conclude that the first bilateral Mongolian-Chinese summit was a success. The Mongolians met their expectations of raising the level of mutual trust, consolidating cooperation, and bolstering shared trading and investment activities, among other things.

Both leaders lauded the outcome.

Elbegdorj described it as a “historic act that formed the long-term prospects of our relations.”

Speaking in the Mongolian parliament, Xi said he was pleased with the results of the visit and fully confident in the bright future of Sino-Mongolian relations. Wrapping up his answers at the summary press conference, the Chinese president said, “China is ready to become a trustworthy, responsible and good neighbor, a good friend and a good partner for Mongolia.”

The wish going forward is that Beijing’s policy toward Mongolia will always be in line with those words and that relations between the two countries will continue to develop harmoniously in the interests of both peoples, and in the interests of peace and security in northeast Asia and the Far East.

Mark Golman, Ph.D, history, head research partner at the Institute of Oriental Studies of the Russian Academy of Sciences, specially for the Internet-magazine “New Eastern Outlook.”