BEIJING Aug 18 China expects to sign agreements
to give landlocked and resource-rich Mongolia easier access to
Chinese territory for its exports when President Xi Jinping
visits the country this week, a senior diplomat said on Monday.
Mongolia, nervous about over-dependence on its enormous
neighbour, had once favoured a more circuitous and expensive
northerly rail route via Russia that would connect its mines to
the Pacific coast, a plan the World Bank said was unrealistic.
But in an apparent recognition that China is still the best
option for Mongolian exports, Mongolia is now talking with China
about a route directly south.
Assistant Chinese Foreign Minister Liu Jianchao said that
making the trans-shipment of goods from Mongolia would be one of
the topics for discussion during Xi's two-day trip to Ulan
Bator, which starts on Thursday.
"Everyone knows that Mongolia is a land-locked country with
no sea ports, so the issue of trans-shipment, especially via
China, is a very important need for Mongolia. China fully
understands this and will do all it can to help Mongolia to
smoothly and more easily carry out trans-shipments," Liu told
reporters in Beijing.
"Both sides are currently having talks on this issue," he
added, declining to provide details. "The direction of these
talks is to make Mongolia's trans-shipments easier and
Soaring Chinese demand for commodities like coal has
underwritten Mongolia's rapid growth, with more than 90 percent
of its exports sold to China.
Still, Beijing's growing economic hegemony has caused
disquiet among Mongolian lawmakers, who hastily drafted a law in
2012 to limit foreign ownership in "strategic" sectors.
The law was designed to block efforts by China's state-owned
Chalco Group to acquire a majority stake in
Mongolian-based coal miner South Gobi Resources.
Mongolia had ambitions to become China's top coking coal
supplier, largely through the development of one of the world's
biggest untapped mines at Tavan Tolgoi, near the Chinese border.
However Mongolia has complained that it has not received
fair value for the coal, arguing that the lack of alternative
buyers allows Chinese firms to drive down prices. A dispute with
Chalco, which signed a supply deal with Tavan Tolgoi in 2011,
has contributed to a decline in coal shipments.
Liu said that while there were "different points of view" on
certain issues, generally China felt that Mongolia welcomed
"From what we can see from our contacts with the Mongolian
government, people and companies, the Mongolia side really
welcomes China's investment," he said.
"Both sides have had very effective cooperation on the
energy and mining side. Talks on relevant projects, including
coal mines, railways and roads are ongoing. We hope that there
can continue to be progress."
In October, Mongolia agreed to establish a working group
with China to oversee the construction of new road, rail and
pipeline infrastructure connecting the two countries with
Liu would only say that China was talking with both Mongolia
and Russia about the oil pipeline.
(Reporting by Ben Blanchard; Additional reporting by David