Mongolia, China pledge to double annual two-way trade

ULAN BATOR (Mongolia) — China and Mongolia yesterday pledged to almost double their annual two-way trade to US$10 billion (S$12.4 billion) by 2020 as President Xi Jinping became the first Chinese head of state in more than a decade to visit this sprawling resource-rich nation sandwiched between China and Russia.

China also agreed to give the landlocked country access to ports in its north and north-east, the official Xinhua news agency said. No details were immediately given.

Mr Xi met President Tsakhia Elbegdorj in the Mongolian capital, where the two signed a joint declaration upgrading ties to a “comprehensive strategic partnership” based on trust, friendship and “a common aspiration for closer ties of mutual benefit”, Xinhua said.

Today, Mr Xi plans to meet Prime Minister Altankhuyag Norov, who is chairman of Mr Elbegdorj’s ruling Democratic Party, and deliver a speech at the Great Hural, Mongolia’s Parliament.

China accounts for more than half of the country’s external trade and receives almost 90 per cent of its exports, mainly copper, coal and animal products, while supplying 37 per cent of its imports. Bilateral trade has soared over the past decade, reaching US$6 billion last year.

Faced with declining foreign investment and increased inflation and unemployment, Mongolia is desperate for more routes to export its mineral resources. Mr Xi’s trip to Mongolia — the first by a Chinese president in 11 years — is expected to include discussions on infrastructure investment as well. Four of 11 agreements under discussion involve ground transportation to Chinese ports, to better ship high-value minerals to South Korea and Japan, China expert Munkhtuul Banzragch said.

Mongolia is building a railway from one of its largest coking coal deposits to the Chinese border. Still undecided is the much-debated issue of whether to stay with Mongolia’s wide-gauge rail inherited from its time as a Soviet client state or shift to a narrower gauge used in China.

Mr Xi will oversee the signing of 20 cooperative agreements covering mineral extraction, infrastructure building, finance and diplomatic relations, the official China Daily newspaper said.

With several major mining projects in legal limbo, Western investment in Mongolia has fallen sharply, causing the country to turn increasingly to neighbours China and Russia to support its economy, which traditionally relied on animal herding.

Mr Xi’s visit will be followed weeks later by Russian President Vladimir Putin, who is scheduled to visit Mongolia next month. AP