Vi­tal deals signed on Xi’s trip to Mon­go­lia

China Daily (Canada) - - CHINA - By WU JIAO in Ulan Ba­tor and ZHAO SHENG­NAN in Bei­jing

China and Mon­go­lia signed more than a dozen key in­fra­struc­ture and en­ergy co­op­er­a­tion agree­ments on Thurs­day aimed at boost­ing land­locked Mon­go­lia’s min­eral trade and poor trans­porta­tion links while meet­ing China’s grow­ing en­ergy de­mand.

Among 26 co­op­er­a­tion agree­ments signed on the first day of the first state visit by a Chi­nese pres­i­dent to Mon­go­lia in more than a decade, 17 cover trade, in­fra­struc­ture, en­ergy and fi­nan­cial co­op­er­a­tion.

The agree­ments in­cluded a mem­o­ran­dum of un­der­stand­ing on strength­en­ing coal-pro­cess­ing co­op­er­a­tion. Sources close to this said the doc­u­ment states sup­port for a long­ex­pected coal gas project worth $30 bil­lion.

In a joint dec­la­ra­tion, the two na­tions hailed the im­por­tance of the coal gas project and backed en­ter­prises from both coun­tries in push­ing it for­ward.

The project would be car­ried out by Sinopec Group and a Mon­go­lian part­ner, the sources said.

Dai Bing, direc­tor of the coal in­dus­try in­for­ma­tion depart­ment at JYD On­line Corp, a bulk com­mod­ity con­sul­tancy in Bei­jing, said the project would ben­e­fit both coun­tries, as Sinopec would bring ad­vanced tech­nol­ogy to Mon­go­lia and China would have an­other im­por­tant gas sup­ply chan­nel in ad­di­tion to pipe­line gas from Rus­sia.

“Trans­porta­tion of coal gas is also much cleaner and eas­ier than delil­ver­ing coal from Mon­go­lia to China,” Dai said.

China’s de­mand for coal has fallen and nat­u­ral gas con­sump­tion has soared in re­cent years, with the gov­ern­ment en­cour­ag­ing clean en­ergy, and de­ter­mined to re­duce car­bon emis­sions.

China’s largest coal pro­ducer, the Shen­hua Group, China Devel­op­ment Bank and Mon­go­lian of­fi­cials also signed a fi­nanc­ing agree­ment for a rail link to carry coal across the bor­der, from Mon­go­lia’s Gashuun Sukhait port to the Gants Mod port in China.

The agree­ments were signed af­ter ex­tended talks between Pres­i­dent Xi Jin­ping and his Mon­go­lian coun­ter­part Tsakhi­agiin El­beg­dorj.

The Mon­go­lian leader re­ferred to Xi as “Mon­go­lia’s most dis­tin­guished guest” and de­scribed his visit as a his­toric one.

Talks between the two lead­ers, orig­i­nally sched­uled for 90 min­utes, were ex­tended by an hour, with their dis­cus­sions cov­er­ing nearly all sec­tors, El­beg­dorj told re­porters.

Xi told El­beg­dorj that de­vel­op­ing re­la­tions with Mon­go­lia is a pri­or­ity for Chi­nese diplo­macy, adding that the two na­tions should in­te­grate their ad­van­tages dur­ing co­op­er­a­tion.

“China has the will­ing­ness and ca­pac­ity to help Mon­go­lia trans­late its ad­van­tages into economic devel­op­ment through close co­op­er­a­tion,” Xi said.

He pro­posed a

“three-in-one” co­op­er­a­tion model, in­te­grat­ing min­eral re­sources, in­fra­struc­ture con­struc­tion and fi­nan­cial co­op­er­a­tion, to help im­prove Mon­go­lia’s limited in­fra­struc­ture and trans­porta­tion links with China and cover Mon­go­lia’s short­age of cap­i­tal.

With nat­u­ral re­sources worth an es­ti­mated $1.3 tril­lion, Mon­go­lia has not fully tapped its ad­van­tages since a law was in­tro­duced in 2012 lim­it­ing for­eign own­er­ship in “strate­gic” sec­tors.

Growth is the weak­est for four years and in­fla­tion is ris­ing. For­eign in­vest­ment dropped by 70 per­cent in the first half of the year, ac­cord­ing to Bloomberg.

China ac­counts for more than half of Mon­go­lia’s ex­ter­nal trade and re­ceives nearly 90 per­cent of its ex­ports, mainly cop­per, coal and an­i­mal prod­ucts. Bi­lat­eral trade has soared over the past decade, reach­ing $6 bil­lion last year.

Gao Shu­mao, for­mer Chi­nese am­bas­sador to Mon­go­lia, said that having re­al­ized the neg­a­tive ef­fect of the for­eign own­er­ship law, which had been re­vised last year, Mon­go­lia hoped to re­verse plum­met­ing for­eign in­vest­ment and re­vive its econ­omy.

Both sides also signed a deal al­low­ing Mon­go­lia to use six ports in north­ern and north­east­ern China for im­ports and ex­ports. Of­fi­cials said the ports in­cluded Tian­jin, Dalian and Jinzhou. Con­tact the writ­ers at wu­jiao@ chi­nadaily.com.cn and zhaosheng­nan@chi­nadaily.com.cn

Du Juan con­trib­uted to this story.

B. RENTSENDORJ / REUTERS

Pres­i­dent Xi Jin­ping and his Mon­go­lian coun­ter­part Tsakhi­agiin El­beg­dorj at­tend a sign­ing cer­e­mony on Thurs­day in Ulan Ba­tor, the Mon­go­lian cap­i­tal.

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