Mongolia's aloofness only hinders itself

Following editorial appeared in Global Times newspaper of Chinese Communist Party issue dated Nov 2, 2009.This editorial carries anti-Mongolian sentiment.

By Ganbat, editor of the MonInfo News Service

Mongolia's aloofness only hinders itself

Mongolia's skepticism toward China has gone too far with its plans to bar China from developing the copper and gold mine of Oyu Tolgoi.
Touted as the world largest copper and gold reserve, and just 80 kilometers away from the Chinese border, the gigantic development project will significantly boost the local economy.
An unnamed Mongolian official was quoted by the Sidney Morning Herald as saying that "We have something in our blood about China. It will be very difficult for Chinalco to come into Mongolia."
The largest shareholder of Rio Tinto, Chinalco may be involved in the project by building the roads leading to the mine and supplying electricity and water for the project.

Canadian company Ivanhoe, in which Rio Tinto holds a 19.7 percent stake, signed a deal with the Mongolian government early October to develop Oyu Tolgoi. The Ivanhoe-Rio Tinto consortium together will hold a 66 percent stake in the mine.
Due to its past history and tenuous geographical position between Russia and China, it's understandable that Mongolia looks to balance its relationships with the major powers.
Its diplomatic policy of looking for a "third neighbor" has brought it closer to the US, Japan, South Korea and Europe.
But Mongolia should not forget the economic boom it has derived from trade with China.
China has been Mongolia's largest trading partner for 10 years, receiving over 60 percent of its exports, although the total trade volume between the two countries is a miniscule 0.05 percent of China's total.
Investment from China accounts for half of the FDI its northern neighbor receives from the world.
But busy business exchanges have not brought the closeness they should. Anti-Chinese feeling is still strong in Mongolia, and this is clearly reflected in government policy on natural resources.
China is the closest and largest market of Mongolian mining products, and has an abundant supply of technological staff and advanced machinery equipment that is highly competitive with other countries.

Despite this, China is intentionally and consistently excluded from normal business opportunities in developing Mongolian mineral wealth.
The Erdenut copper mine, which once accounted for one-third of the Mongolian economy, exports 90 percent of its ore to China, yet not a single Chinese company deals with it directly.
Chinese mining companies lag behind their peers from Russia, Canada and Australia in their involvement in Mongolian mines.
Ironically, much of this mining development would have been impossible without Chinese companies' participation in building infrastructure and providing logistical support. Chinese companies are unfairly sacrificed for Mongolia's strategic concerns.
A long-term win-win deal has to be built on sincere cooperation that benefits both sides. Without it, China will suffer losses, but Mongolia probably has more at stake.
The economic growth of China has created a huge demand for natural resources.
China does not deny this, but intends to strengthen cooperation with neighboring countries on the basis of mutual trust and shared benefit.




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