Mongolia-China relations: Joint creation of values and shared benefitsThe Mongol Messenger
On the occasion of the 70th anniversary of the establishment of diplomatic relations between Mongolia and People’s Republic of China and the 25th anniversary of the renewal of the Treaty on Friendly Relations and Cooperation between the two countries, President Kh.Battulga paid a state visit to China at the invitation of his Chinese counterpart Xi Jinping. During the visit, the sides reviewed the progress in bilateral relations since the establishment of diplomatic relations and defined principles of future cooperation.
High-level visits are classified by levels as working, official and state visit. The state visit of President to China coinciding with significant anniversaries will be a highlight in the history of bilateral relations. Previously, Mongolian Presidents made state visits to China in 1998, 2004, 2010 and 2015.
This time, the heads of states officially met for the third time. Before, they met in 2018 during Shanghai Cooperation Organization Summit held in Qingdao on June 9-10 and the Eastern Economic Forum held in Vladivostok on September 12.
The visit was organized at a high level with the Chinese side warmly welcoming President Kh.Battulga. On the first two days of his visit, President made a state visit and on the remaining two days he attended the Second Belt and Road Forum for International Cooperation.
Among delegates of about 150 countries gathered to attend the forum, there were heads of state and government of 37 countries. Along with the Mongolian President, leaders of five countries paid state visits to China few days earlier than the forum. Organizing the state visit just before the major international conference shows that China is giving great importance to its relations with Mongolia.
During the meeting, Kh.Battulga and Xi Jinping concluded that the bilateral relations have reached comprehensive strategic partnership, which is achievement of the last 70 years of cooperation. The heads of states also agreed to further develop the partnership at all levels and intensify mutually beneficial cooperation.
Creating values together and benefiting equally
President Kh.Battulga emphasized that the long-standing friendly relations with China has been one of Mongolia's diplomatic priorities, which was quoted by China’s state news agency Xinhua. According to China Daily, the President also reaffirmed that Mongolia supports the ‘One-China’ policy, noting that the issues related to Taiwan and Tibet are China’s internal affairs.
President of China Xi Jinping noted, “The two countries need to follow suitable political orientation, develop cooperation in all fields, respect each other and develop strategic partnership based on the principles of mutual trust. In the future, the countries should organize regular bilateral visits and mutually respect the fundamental interests of each other,” which was also quoted by China Daily.
Presidents of the two countries agreed to take certain measures to create correlation between the projects ‘Belt and Road’ and ‘Development Road’, maintaining the direction of the relationship between Mongolia and China.
In the frameworks of the trade and economic partnership, they came to the decision to pay more attention to the productive and immediate implementation of the works funded by non-refundable aid and loans granted to Mongolia by China as well as cooperating in increasing the export of not only mining commodities, but also value-added products--particularly agricultural products. For instance, President Xi Jinping expressed willingness to work towards progress, by establishing a working group, in regard to proposals of President Battulga concerning ban on meat export from the western region of Mongolia to China and facilitating conditions for exporting agricultural products from the western and eastern regions of the country to China.
Of the total of 20 agreements signed during the state visit, the two presidents were present at signing ceremony of eight agreements between governments and agencies. As for the cooperation agreements between entities of Mongolia and China, the signing ceremonies took place separately. It should be mentioned that the Government of Mongolia will not be building new factories by taking loans, but instead, the entities of the two countries will take on their own risks when building joint factories. For instance, the Mongolian company, ‘Erdenes Steel’, signed an agreement to build a coke and steel factory complex in partnership with the Chinese side. To be built with a loan from a Chinese bank, the factory will have the annual capacity to produce 10 million tons of steel, during which time of operation, the railway between Zuunbayan and Tavantolgoi is expected to be available. Thus, the joint factory will have the opportunity to sell their product at global market.
Furthermore, the ‘Gangar Invest’ company made a deal with a Chinese bank to build an apartment complex, while the company, ‘Moshea Eco Energy’, is also receiving the 50 MW solar power plant equipment worth USD 65 million and the financing of USD 550 million for Buuruljuut power plant through the loan agreement. The government will not make guarantees, and all of the entities will be held responsible for their agreements.
In connection, a new principle was submitted during the state visit: ‘Let’s create new value, equally sharing its benefits, and develop win-win cooperation’. In other words, it means to reduce the amount of aids received by Mongolia, and cooperate and create value rather than giving soft-loans and non-refundable aid.
However, it does not mean that there will be no more support. During the visit of President Kh.Battulga, the two sides signed the agreement for non-refundable aid of CNY 700 million to Mongolia. The aid is the amount to be given for 2019 as a part of the non-refundable aid of CNY 2 billion to be granted by the Chinese government.
Moreover, an important issue was discussed during the meeting of the two presidents. Previously, the two sides discussed many issues and agreed to implement various projects and programs. It is a true fact that majority of the projects are not being effectively implemented. For this reason, the two sides expressed their opinions that after doing researches, the projects that can be actually implemented need to be continued and those deemed cannot be done will be stopped immediately.
Chinese side expresses to support ‘North East Asian Super Grid’
During the official talks with President of the People’s Republic of China Xi Jinping, the Chinese side expressed to support the initiative of Mongolian President Kh.Battulga on establishing North East Asian Super Grid and its regional joint organization. This large-scale project can define Mongolia’s involvement in progress of regional integration.
Besides coal, Mongolia has abundant resource of renewable energy. According to the researchers, the country has potential to generate energy source with the capacity of 2.6 terawatt using solar, wind, water and geothermal heat. In particular, over ten percent of Mongolian territory has rich wind resource and it is possible to produce 2.5 million GW energy with it. Mongolia also enjoys 270 sunny days a year. With its solar energy resource, Mongolian Gobi is in the second place after the Sahara Desert. Therefore, there is opportunity to produce energy using this abundant resource and supply energy to other countries such as South Korea and Japan.
Mongolian and Chinese sides reached mutual understanding on Mongolia’s initiative on establishing joint organization of North East Asian Super Grid at this time when Chinese authorities are talking about building global super grid.
President Kh.Battulga calls upon participants of the Belt and Road Forum to actively participate and collaborate in the super grid project, which will be implemented with public-private multipartite partnerships of regional countries.
Mongolia’s involvement in ‘Belt and Road’
In his remarks delivered at the Belt and Road Forum, President Kh.Battulga highlighted, “The 40 years of reform and development, transformed China into the second-largest economy in the world. I welcome the Belt and Road Forum’s principles of “extensive consultation, joint contribution, and shared benefits,” as it is a testament to how China is willing to share from its economic success. Surely, these principles are in harmony with the spirit of our times.”
During his meeting with Chinese President Xi Jinping, President Kh.Battulga said that Mongolia will correlate its ‘Development Road’ program with China’s ‘Belt and Road’ Initiative and cooperate with China to develop Mongolia-Russia-China Economic Corridor. During the 4th Meeting of heads of three countries in Vladivostok last year, the President agreed with Russian President V.Putin and Chinese President Xi Jinping to intensify the implementation of the Economic Corridor Program.
One of Mongolia’s important engagements that is harmonizing with the Belt and Road Initiative is the Mongolia-Russia-China Economic Corridor. The main objective of the Belt and Road Initiative is to build the infrastructure that links Asia with Europe. Twenty percent of transit transport being made between China and Europe are being passed through the railway of ‘Ulaanbaatar Railway’ Mongolian-Russian joint venture. The Mongolian side is available to raise this percentage. During the official talks of President Kh.Battulga and President Xi Jinping, the sides touched this issue.
About it, President Kh.Battulga said at the forum by mentioning that Mongolia has achieved substantial results by developing its soft and hard infrastructures in the past few years. “Specifically, we have successfully connected all the provinces of our country through energy transmission lines, internet communication networks, and around 6,000 kilometers of paved road. Starting from this year, we will start intensifying the building of our railroads. Utilizing our own resources to build our own infrastructure is a significant challenge to us as Mongolia is the least densely populated country in the world that accounts two persons per square kilometer,” he said.
Concluding his remarks, President Kh.Battulga invited landlocked regional countries to gain access to the Northeast Asian market by using the infrastructure being built by Mongolians.
Caofeidian port- one of Mongolia’s gateways to the sea
After paying a state visit to the People’s Republic of China and attending the Second Belt and Road Forum for International Cooperation, President of Mongolia Khaltmaagiin Battulga visited Tangshan City of Hebei Province to familiarize with the local Caofeidian port.
Located in Tangshan City of Hebei Province, at a distance of 220 km from Beijing and 120 km northeast of Tianjin City, the port is part of the Bohai Economic Rim. It is an important channel connecting the northern and northwestern regions of China with over 110 ports of 70 countries via the Pacific Ocean. Covering an area of 194 thousand ha, the port is capable of shipping 410 million tons of cargo, including 250 million tons of coal, per annum. In 2017, the throughput of the port reached 370 million tons. The 97 docks of the port are used for coal (25), steel (41), ore (6), and containers (10).
Mongolia and China established transit transport agreement in 2014, but Chinese side has not ratified it yet. However, with the 2014 amendment of the Mongolia-China Intergovernmental Agreement on the Access to and from the Sea and Transit Transport by Mongolia through China’s Territory, established in 1991, Mongolia’s use of sea ports in northern and eastern parts of China was authorized.
The Zamiin-Uud-Erlian land port is directly linked to Caofeidian by rail, and there is an advantage of avoiding rail traffic and high cost.
According to Z.Enkhbold, Chief of Staff of the President, the coal must be washed to transport to Caofeidian port. Therefore, coal of Tavantolgoi deposit will be washed at Sainshand railway after it will be put into operation, and will be transported to China visa Erlian land port. It is expected to put Khangi-Mandal railway into operate in late 2020 and planned to transport coal and iron ore to Caofeidian port by this railway. By doing so, ordinary freights only will be transported through Zamyn Uud -Erlian port. The sides have been talking on facilitating railway transport tariff since 2014. As President Kh.Battulga said, he discussed this matter with Chinese President during his recent visit and Chinese side expressed commitment to pay attention on tariff issues.
Besides, Mr. Enkhbold mentioned that about transit transportation there is an issue depending on Chinese side. Specifically, Mongolian side reported that freight transportation is in traffic jam due to insufficient carrying capacity of Erlian railway. This obstacle will disappear in case expansion work of 200km Erlian-Jinin railway completes.
In brief conclusion on the significance of the state visit, the sides reviewed what advancements and changes had been in bilateral relations of the two countries in the last 70 years since their establishment of diplomatic relations. In addition, the parties defined through what principles the countries would cooperate in the coming years.