Mongolia’s Prairie Road Strategy Broadens the Prospects for Economic and Trade Cooperation with China
Mongolia is one of the earliest countries to have established diplomatic relations with China. At present, Sino-mongolian relations have gained a previously-unseen momentum. In 2017, J. Erdenebat, former Prime Minister of Mongolia, paid a visit to China, where he met Chinese President Xi Jinping and held official talks with Premier Li Keqiang. Both sides exchanged ideas to further expand practical cooperation and committed to vigorously promotingthe Belt and Road Initiative and Mongolia’s Prairie Road development strategyto bring about a new driving for bilateral good neighborliness.
Re cent ly, Pr ime Min ister Ukhnaagiin Khurelsukh of Mongolia paid a visit to China. In order to promote economic and trade exchanges and cooperation between China and Mongolia, on 11th April, the ChinaMongolia Business Forum (hereinafter referred to as the forum) was coorganized by the China Council for the Promotion of International Trade (CCPIT) and the Mongolian National Chamber of Commerce and Industry (MNCCI) in Beijing. The Forum was attended by nearly 600 representatives of governments and entrepreneurs from both sides, representing infrastructure, project contracting, building materials, clean energy, mineral resources, tourism and other fields.
The achievements of China’s reform and opening up have benefited neighboring Mongolia
Jiang Zengwei, Chairman of the CCPIT, pointed out, during the forum, that China and Mongolia are friendly neighbors who share mountains and rivers, support each other, participate in win-win cooperation, and are good friends who will visit each other frequently. In 2014, Chinese President Xi Jinping paid a historic visit to Mongolia to improve Chinese-Mongolian relations by means of a comprehensive strategic partnership, which marks the best stage of Chinese-Mongolian relations in history. Both sides further enhance cooperation in various fields, bringing sound benefits to both countries and peoples.
“In the economic and trade field, China has been Mongolia’s largest foreign investor and trade partner for years.” According to data revealed by Jiang, over the past 10 years, the contribution of bilateral trade with China to Mongolian economic growth has reached nearly 50 percent. China’s direct investment in Mongolia has surpassed USD 4 billion, accounting
for one third of Mongolia’s foreign investment. Almost 100,000 jobs have been created and over USD 2 billion in taxes has been paid in Mongolia due to Chinese companies’ investment in the fields of infrastructure, mining and projects regarding people’s livelihoods. In the sphere of culture, more than 1 million visits were made from Mongolia to China annually for five consecutive years. At present, there are over 100,000 Mongolian foreign students in China. The ties connecting the peopleto-people exchanges and economic interests of the two sides are getting closer and closer.
At present, China’s economy is exhibiting a stable performance with good momentum for growth. The transformation and upgrading of traditional industries has accelerated. The capability for making technological innovations is gaining strength. New industries, new forms of business, and new models are thriving. The Business Climate Index reached a record high in the past five years. The driving force of economic growth is robust. Jiang pointed out, “China’s economic growth is brought about by the policies regarding reform and opening up. We will work hard to deepen reforms and continue to open China up wider to the rest of the world.”
In the next 15 years, China is expected to import USD 24 trillion of goods and absorb USD 2 trillion of foreign direct investment. China’s overseas investment will reach USD 2 trillion, which will provide excellent development opportunities for all countries, including Mongolia.
“We welcome Mongolia to share the fruits of China’s economic development.” Jiang believes that the economic and trade cooperation of the two countries has a promising future.
China’s Belt and Road initiative and Mongolia’s Prairie Roadstrategy share the same future
China and Mongolia have strong economic complementarity and great potential for cooperation. For a long time, by means of joint efforts of both sides, China and Mongolia have promoted balanced progress in terms of mineral resources, infrastructure and financial cooperation in order to ensure successful economic and trade cooperation. Mongolia has supported the Belt and Road Initiative from the beginning, and has actively implemented its own Development Road which is in harmonization with the initiative. Both sides have reached a consensus about integrating China’s Silk Road Economic Belt and Mongolia’s Prairie Road development strategy, which will bring about new opportunities for bilateral economic and trade cooperation.
Prime Minister Khurelsukh of Mongolia attended the forum and said that the relationship between China and Mongolia is friendly and has a long history due to common borders. China has been Mongolia’s largest foreign investor and trade partner for years. The two countries have great potential for cooperation in the fields of the economy and trade. Mongolia supports the integration of China’s Belt and Road Initiative and Mongolia’s Prairie Road development strategy and is ready for the cooperation.
“The business environment in Mongolia has been quite favorable in recent years. The investment environment is recovering, the trust of investors is being restored, and the legitimate rights and interests of investors is being protected through various measures. The Mongolian government has been ca r r y ing out specific actions to improve the environment for businesses and investors by amending the general law on taxation. In the future, we will continue to introduce more measures to optimize the business environment,” said Khurelsukh.
He stressed that entrepreneurs from China and Mongolia should actively explore and seize opportunities for bilateral cooperation, broaden the types of trade products, and increase the export of high value-added products and agricultural products from Mongolia to China. He also called on Chinese entrepreneurs to invest in mining, energy and environmental protection, energy resources and other Mongolian industries involving cutting- edge technologies.
Jiang sa id that China and Mongolia have their own advantages in terms of industrial structure and natural resources, and are economically complementary to each other, which creates a favorable environment for bilateral cooperation. He pointed
China has been Mongolia’s largest foreign investor and trade partner for years.
out that the two countries have been making efforts to speed up the linking of the Belt and Road Initiative with Mongolia’s Prairie Road development initiative, so as to bring economic and trade exchanges between the two countries into a new era.
At the signing ceremony of the forum, Jiang Zengwei, on behalf of CCPIT, and B.lkhagvajav, President of MNCCI, signed a memorandum of understanding regarding cooperation on commercial laws. Moreover, companies from the two countries also signed more than 35 cooperation agreements in various fields, such as energy, construction and logistics.
Lkhagvajav also expressed that China is Mongolia’s largest trade partner and foreign investor, and that Mongolia and China have great potential to deepen their pragmatic cooperation in various fields. Mongolia has actively participated in the Belt and Road Initiative, has expanded bilateral cooperation in the fields of trade and investment, agriculture and livestock husbandry, energy and other fields, and will seek new fields for cooperation in the future.
He also highlighted the importance of forestry: “In terms of forestry, Mongolian enterprises need to seek out innovations and create new ways to cooperate with China. Given the huge demand in this regard, we are hoping to continue our cooperation.”
There are still other great opportunities for economic and trade cooperation to explore
Jiang put forward three suggestions for future economic and t rade cooperation between the two countries.
First, the sides should further expand the scale of bilateral trade. “Mongolian enterprises have long been looking forward to lower export tariffs to China and exporting more products to China. Chinese enterprises are also looking forward to importing more farm products and minerals from Mongolia.” He argued that the businesscircles in both sides should work together to explore new growth areas of trade, expand trading areas and promote trade growth. Moreover, they shouldactively contribute suggestions to ChinaMongol FTA Joint Feasibility Studies, promote the connectivity of railway, highway and other construction, enhance customs clearance and transport facilitation and promote cooperation on transit transport in order to facilitate transportation of people and goods.
He also said that China will host the first China International Import Expo in Shanghai later this year. This will act as a new platform for other countries around the world to explore the market in China. The participation of Mongolian business circles will of course be welcomed.
Meanwhile, both sides should further expand their investment cooperation. Jiang noted that China’s complete industrial system can meet Mongolia’s increasing demands for funding, technology and management experience brought about by Mongolia’s accelerat ing u rba n iz at ion a nd industrialization. Enterprises from both sides can cooperate in a wide range of fields, such as production capacity, deep processing of agriculture and animal husbandry, energy and mineral resources, and transport, so asto gain win-win results and sustain mutual development.
“We hope that business leaders from the two countries can actively cooperate with the governments to promote the establishment of a crossborder economic cooperation zone. We also hope that Mongolia can maintain the stability and continuity of the relevant investment policies, creating a favorable business environment for foreign investors, including Chinese enterprises, to invest in Mongolian industries,” Jiang continued.
Besides this, both sides should further enrich the way that they carry out economic and trade exchanges.
“Convenient work channels and sufficient exchanges and communication are the foundation for pragmatic economic and trade cooperation.” Jiang went on to explain that the CCPIT is ready to work with MNCCI and other counterparts to hold more forumsand exhibitions, organize more exchanges and visits, strengthen the sharing of information, and provide training for personnel. Serving as a go-between for enterprises from both countries, the CCPIT is also willing to work together to provide commercial legal services and help enterprises from both sides to understand policies and regulations, business news and project information.