The New York Times
By James Brook
July 9, 2004
restaurants and markets are
in Mongolia as ties
BATOR, Mongolia, July 8 - Two weeks ago, China's largest copper
company signed a letter of intent to study investing in
Mongolia's largest mining project. This week, Mongolia's
president, on a state visit to Beijing, invited China to drill
for oil. Next month, zinc production is to start at a new $50
million Chinese mine in eastern Mongolia.
To link it
all together, Chinese aid is paying for Chinese crews this
summer to pave major roads across Mongolia's grassy steppes.
More may come from a $300 million loan offered by China's
president when he stopped here last year.
years ago, Mongolia, then a Soviet satellite, kept its land
borders with China largely closed. Today, in a turnaround that
reflects the rapid reorientation of the 13 other countries that
have land borders with China, Mongolia now values China as its
largest foreign investor and largest trading partner.
opening permanent border posts here, here and here," Wong Fu
Kang, chargé d'affaires at the Chinese Embassy here, said
Tuesday tapping his forefinger on crossing points along his
country's long border with Mongolia.
Mongolia's western end, he traced the path of a proposed road to
connect Western China with the Russian city of Novosibirsk. In
central Mongolia, there is a railroad project that will link
copper and coal mines. In Eastern Mongolia, China has proposed
building a bridge. To J. Peter Morrow, chief executive of the
private Agricultural Bank of Mongolia here and Mongolia's most
prominent American businessman, the Chinese "are pushing on all
fronts: a road here, a bridge here, a coal mine here."
Mongolians share that uneasiness about the potential threat from
a neighbor with a population more than 520 times that of the 2.5
million in Mongolia. Last month, in a poll of 2,170 adults, the
Sant Maral polling group asked people to choose two countries
that could be considered best partners for Mongolia. Russia came
in first, receiving twice as many votes as the United States,
which came in second. China came in fourth, after Japan.
its image, China sent $7 million for a new lighting system for
this capital's showcase Sukhbaatar Square, named after a
nationalist who, in 1921, declared Mongolia's independence,
ending more than two centuries of Chinese colonial rule. In
April, the Chinese government sponsored Chinese Cultural Days, a
celebration of Chinese music, art and circus talent that was
suspended in the early 1960's because of Russian-Chinese
many Mongolians credit China's economic locomotive as the reason
for Mongolia's economy expanding at an expected rate of 5.5
very grateful that the Chinese economy is so active," Mongolia's
prime minister, Nambaryn Enkhbayar, said. Noting that China is
running short of coal, he said that a Chinese company planned to
start mining coal in eastern Mongolia this year.
cranes puncture the summer sky here as Chinese construction
crews build new apartment and office buildings, softening the
old Soviet image of the city. Shedding 75 years of Russian
economic domination in a decade, Mongolia is rapidly becoming
China's Canada, a northern resource.
my vision of this country: Mongolia as a Canada," Sedbazar
Otgonbat, vice chairman of Mongolia's foreign investment and
foreign trade agency, said in an interview. "China and Mongolia
must work hand in hand, as Canada and the U.S.A."
Historically marginalized by its landlocked location, Mongolia
now finds that the rise of China is giving it a front-row seat
for the biggest economic story in the world today.
people say Mongolia's landlocked economy is a disadvantage; I
say that, with China, it is an advantage," said D. Jargalsaikhan,
chairman of the Mineral Resources Authority of Mongolia, a state
agency. "What makes Mongolia unique is that it has China as a
neighbor. The Chinese market is just like a black hole where
everything disappears - copper, iron, zinc."
the new point of reference, over 30 Chinese- language schools
have opened here in recent years.
the big brother, you cannot avoid China," said L. Sumati,
director of the Sant Maral polling group. Trained in Moscow, Mr.
Sumati now has his two children, both in their 20's, studying in
March, 400 Mongolian students competed for 10 scholarships
offered by Beijing to study in China.
ago, if you wanted to study Chinese, you would have had to go
Moscow," Mr. Wong, the Chinese diplomat, said. "More and more
Mongolians are studying Chinese. Before, Russian was the
dominant foreign language here."
Russian visas rules strict, many Mongolians and foreigners based
here say they have stopped traveling north.
bureaucracy, this old-time thinking is strangling our economic
relations with Russia," said Ganbold, a local journalist.
pours money into developing its own western regions, Mongolia
suddenly finds that modern cities and highways are taking shape
only a few hundred miles away.
Chinese government is adopting big plans to develop the West,"
Mr. Wong said. "This will be beneficial to Mongolia."
Mongolians allowed to visit China without visas, a snowbird
phenomenon has evolved, with about 400,000 Mongolians visiting
China last year, compared with 182,000 Chinese who visited here.
of the Chinese who came were investors. According to the Chinese
Embassy, there are 1,100 Chinese companies in Mongolia.
probably have 100 Chinese restaurants now," said Stephen D.
Vance, executive director of Mongolians for Open Society, a
group that received donations from the Soros Foundation. "The
textile industry is pretty much 50 percent Chinese. The leather
industry is dominated by Chinese. Cashmere is more than owned by
the Chinese economic draw can be destructive.
used to have four million deer; there are almost none now," said
Mr. Otgonbat, the vice chairman of the Mongolian government's
foreign investment and foreign trade agency. "Why? The Chinese
buy deer antlers. By shooting them one by one, the whole
population has been killed."
is the big economic attraction for China.
I meet a new Chinese company," said Mr. Jargalsaikhan, the
chairman of Mineral Resources Authority, an investment office.
Sanjaasuren, an opposition congresswoman, said of her old
constituency in northeast Mongolia, "In my constituency, I saw
last spring Chinese companies driving around northeast Mongolia
looking at a lead mine, a zinc mine, a uranium mine and a
low-quality coal mine."
week, the big news was that Jiangxi Copper signed a preliminary
agreement to study buying a major share in development of Oyu
Tolgoi, or Turquoise Hill, one of the three largest copper and
gold deposits in the world.
the owner of the mine, in the Gobi, is preparing to start work
within months on what could be a $1 billion mine.
copper prices are running about 60 percent higher than this time
last year. China is the world's largest consumer of copper.
one foreign businessman warned about the possibility of a
nationalist backlash if a Chinese company wrests control of the
huge mine. "Everyone from the cabinet level to the herders would
protest, out of fear of being consumed by China," he said.
diversify economic ties away from China, Otgonbayar Yondon,
secretary of the ruling Mongolian People's Revolutionary Party,
said that the government wanted to renegotiate free trade
treaties with the United States, Japan, South Korea and the
the Gobi desert recently, Buyantogtokh Delgerjav, a local
governor, said that economic diversification was the best policy
to follow. "In Mongolia, we say we are a little piece of kidney
squeezed between two pieces of fat," he said. "We can't afford
to have bad relations with China or Russia."