The ‘Plan on establishing the China-Mongolia-Russia economic corridor’ signed by China, Mongolia and Russia in June 2016 can be considered a follow-up to the memorandum of mutual understanding the three countries signed in July 2015. The aim of this plan is to build an economic corridor (jingji zoulang – 经济走廊) which will enhance the trade between these three countries, accelerate the economic development of the area involved and, at the same time, increase the competitive power on the international markets as allies. Mongolia only borders China and Russia and therefore has many contacts with these two countries. China is the main recipient of Mongolian export, amounting at 4.92 billion USD. Moreover, China is also the main exporter to Mongolia (1.65 billion USD). The relationship between Russia and Mongolia is also strong, Russia is the fourth destination of Mongolian exports (55.5 million USD) and the second import origin (1.46 billion USD).
How will the economic corridor work?
China, Mongolia and Russia will cooperate through the construction of better transportation routes expanding the current land, sea and air connections. However, this project is not limited to a transportation corridor. The three countries will also cooperate in other areas, such as cultural exchange, resources, agriculture, environmental protection, information flow, tourism, intellectual property and investments. The China-Mongolia-Russia economic corridor will be financially backed by national and private investments, as well as AIIB, BRIC Development Bank, Shanghai Cooperation Organisation Bank and the Silk Road Fund.
This agreement comes short after China ratified the Convention on International Transport of Goods Under Cover of TIR Carnets which can be considered as the international standard for cross-border freight custom transit, which has been effective for China since the 5th of January 2017. The TIR convention could also mean support for the BRI project, as it facilitates good transportation to more than 70 countries, including Mongolia and Russia which are part if the convention as well. The convention makes possible to go through a single custom check within the countries which signed it, making custom clearance faster and easier.
How is BRI implied?
The China-Mongolia-Russia economic corridor has the ultimate goal of increasing the economic ties between the three countries, as well as the political relationships which could lead to future cooperation in infrastructure building. An aspect often left aside is how the China-Mongolia-Russia economic corridor will bring together the Belt and Road, the Russian roads and railways that connect Asia and Europe and Mongolia’s Prairie Road Project. The Prairie Road Project has the goal of improving the connections within Mongolia and towards neighbouring countries. Connecting three colossal transportation infrastructures such as BRI, Prairie Road Project and Russian roads and railways will create an effective network for cross-border trade. In August 2016, China, Mongolia and Russia have sent out a ceremonial delegation of trucks to test the proposed economic corridor. The trucks started their journey in Tianjin (China) and made their way through Mongolia, only to end their journey in Ulan-Ude (Siberia, Russia). The trial run also included eleven stops in key cities along the corridor.
The effort China is making towards establishing economic corridors shows how the goal is not a network of transportation infrastructures, but a complete system that can balance out trade, transportation and synergy. The strategic location of the economic corridors, particularly the China-Mongolia-Russia economic corridor could lead to the establishment of free trade zones or special economic zones that will facilitate communication and trade between Europe and Asia.
Elisa Gambino is a Master’s candidate in Chinese Studies at the University of Edinburgh, UK. She has published the essay “The People’s Republic of China’s Pro Status Quo Approach in Cross-Strait Relations” on the peer-reviewed journal Global Politics Review. Her areas of academic interest include Chinese Economy, low-carbon economies, East-Asian international relations, Emerging Markets, ODI from China, Chinese SOEs and energy markets.