Xi says China to advance hand in hand along path of modernization with Mongolia www.news.cgtn.com

Chinese President Xi Jinping said on Monday that China is ready to work with Mongolia to foster more areas of growth for mutually beneficial cooperation and advance hand in hand along the respective paths of modernization.

Xi made the remarks in a meeting with Mongolian President Ukhnaa Khurelsukh on the sidelines of the Shanghai Cooperation Organization Summit 2026 in Bishkek, Kyrgyzstan.

Xi said peaceful coexistence, mutual support and win‑win cooperation have always defined the mainstream and underlying tone of bilateral ties.

China will continue to place its relations with Mongolia high on its neighborhood diplomacy agenda, he said, adding that China will work with Mongolia to consolidate strategic mutual trust, deepen mutually beneficial cooperation and foster closer people‑to‑people bond.

This will inject fresh vitality into the comprehensive strategic partnership between the two countries and advance the building of a China‑Mongolia community with a shared future, Xi added.

The Chinese president said both sides need to cement the political foundation for the growth of China‑Mongolia relations, respect each other's independence, sovereignty and territorial integrity, and respect each other's core interests and major concerns.

China stands ready to align its development strategies with those of Mongolia, advance traditional cooperation in trade, connectivity, energy and mineral resources, and tap cooperation potential in emerging areas such as green minerals, artificial intelligence and the digital economy, he added.

Xi said the two sides should also strengthen coordination and cooperation on multilateral platforms to jointly tackle global challenges.

For his part, Khurelsukh said no matter how the international landscape may evolve, Mongolia and China have always respected and trusted each other and maintained good‑neighborly friendship.

China's development presents significant opportunities for its neighbors and helps drive development across Asia and the world at large, he said.

Khurelsukh said Mongolia firmly adheres to the one‑China principle, and believes that Taiwan is an inalienable part of China's territory, and that issues concerning Xinjiang, Xizang and Hong Kong are all China's internal affairs.

Noting that the four major global initiatives and the vision of building a community with a shared future for mankind put forward by President Xi carry great significance for safeguarding world peace and security, advancing sustainable development and addressing global challenges, he said that Mongolia stands ready to work with China to implement them.

(With input from Xinhua)

Government Submits 2027 Budget, Highlights First Oyu Tolgoi Dividend www.montsame.mn

Uchral Nyam-Osor, Prime Minister and Member of Parliament and Minister of Finance Mendsaikhan Zagdjav, on August 31 submitted to Byambatsogt Sandag, Chairman of the State Great Khural, draft amendments to the Law on the Budget Framework Statement of Mongolia for 2027 and Budget Projections for 2028-2029, as well as draft laws on the 2027 State Budget, the 2027 Future Heritage Fund Budget, the 2027 Social Insurance Fund Budget, and the 2027 Health Insurance Fund Budget, together with related draft legislation.

The draft amendments to the Budget Framework Statement for 2027 and Budget Projections for 2028-2029 set the general government adjusted revenue at MNT 41.3 trillion, expenditure at MNT 43.6 trillion, and the deficit at MNT 2.306 trillion for 2027.

Prime Minister Uchral said the Government had made nine key decisions within the proposed budget framework.

“We will ensure that the benefits of natural resources are distributed equitably among citizens. We are focusing on supporting small and medium-sized enterprises and the private sector, and revitalizing the economy. Mongolia is set to receive dividends from the Oyu Tolgoi project for the first time. These funds will be used to reduce our dependence on fuel and energy. For instance, we will construct a 300-megawatt Thermal Power Plant No. 6 adjacent to Thermal Power Plant No. 3 and complete the construction of thermal power plants in 10 aimags. Part of the funds will also be allocated to the Savings Fund and used for healthcare and housing,” he said.

Speaker Byambatsogt noted that Mongolia’s first dividend payments from the Oyu Tolgoi project would provide additional resources to be allocated for citizens.

Key figures and measures in the proposed 2027 State Budget include:

Improve the governance and profitability of state-owned enterprises. Dividend revenues of MNT 3.5 trillion are projected to be transferred to the state budget in 2027.
Increase basic pensions for senior citizens by MNT 100,000–300,000.
Fully exempt senior citizens, children, persons with disabilities and low-income citizens from co-payments for medicines for hypertension, cardiovascular diseases and diabetes, thereby protecting their incomes.
Increase the salaries of employees across all public services.
Exempt monthly wage income of up to MNT 792,000 from income tax, reducing the tax burden on citizens by MNT 840 billion.
As part of social insurance reform, exempt citizens from MNT 186.3 billion in social insurance contributions. Students aged 18–24 who are employed will be exempt from social insurance contributions. Employers of start-up businesses will be exempt from social insurance contributions for up to three employees for 36 months. Individuals holding multiple jobs will be allowed to choose one job from which to pay social insurance contributions.
Provide approximately 16,000 citizens with access to housing through concessional loans, co-ownership and rent-to-own arrangements.
Introduce a “One Child–One Computer, One Classroom–One Smart Board” program.
Connect 100 general education schools to renewable energy systems, reduce heat loss and upgrade them with modern technological solutions to develop them into “Green Schools.”
Under the “Green Exemption” initiative, exempt renewable energy equipment, solar panels, energy storage systems, charging stations, and electric-powered vehicles and machinery from customs duties and excise taxes.
Establish 500 electric vehicle charging stations.
The draft legislation incorporates the following fiscal requirements:

Adjusted revenue: Adjusted prices for key mineral commodities were calculated based on price forecasts issued by international financial information institutions, taking into account key macroeconomic indicators and export projections, and used to determine adjusted revenue.

General government adjusted balance: The adjusted balance is projected to have a deficit of no more than 2 percent of GDP, or to be in surplus, thereby meeting the fiscal requirements.

Growth in total general government expenditure: Total expenditure is to be planned in line with underlying economic growth and will not exceed the higher of the current year’s non-mineral GDP growth rate or the average non-mineral GDP growth rate over the preceding 12 consecutive years. For 2027, however, this fiscal requirement will not apply, as the ceiling on total general government expenditure will be increased by the amount of additional revenue. The fiscal requirement will be applied in 2028–2029.

Government debt: The nominal outstanding balance of government debt is projected not to exceed 50 percent of GDP at current prices in 2027–2028 and 45 percent in 2029. This remains below the statutory ceiling under Article 6 of the Fiscal Stability Law, which requires the nominal outstanding government debt balance not to exceed 60 percent of GDP at current prices.

PM Uchral to Attend Eastern Economic Forum www.montsame.mn

Prime Minister Uchral Nyam-Osor will attend the 11th Eastern Economic Forum as a guest of honor, to be held in Vladivostok, Russia, from September 1-4.

Held annually under the auspices of the President of Russia since 2015, this year’s forum will be held under the theme “The Far East: Development for Human Well-Being.” It will feature a range of panel sessions and discussions covering investment, energy, infrastructure, technology, logistics, and international cooperation.

Mongolia has regularly participated in the forum at a high level, and Prime Minister Uchral is scheduled to address the plenary session. He is also expected to pay a courtesy call on Russian President Vladimir Putin and hold bilateral meetings with Russian government leaders and representatives of relevant institutions on the sidelines of the forum.

The meetings will focus on strengthening Mongolia-Russia Comprehensive Strategic Partnership, expanding trade and economic cooperation, and exchanging views on the implementation and future prospects of cooperation in areas of mutual interest, including investment, energy, infrastructure, transportation, and logistics.

The meetings will also provide an opportunity to discuss the outcomes of the interim trade agreement between Mongolia and the Eurasian Economic Union (EAEU) and its member states, which officially entered into force on July 22, 2026.

For the first time, a Mongolia-Russia Business Discussion will also be held on the sidelines of this year’s forum. Government and private-sector representatives from the two countries will discuss improving the trade and investment environment, reducing tariff and non-tariff barriers, expanding transport and logistics cooperation, and increasing participation in regional economic integration.

Mongolia has participated in the Eastern Economic Forum four times at the presidential level and twice at the prime ministerial level since 2016.

Inside Mongolia's Green Data Centre Push www.capitalmarkets.mn

COP17's climate agenda ran alongside a string of economic announcements from Mongolia, including a blue bond issuance guideline and the official launch of the Mongolian Green Finance Corporation. The biggest news of the twelve days, though, was framed in the same green language but aimed at something far larger in scale. On 25 August, the government unveiled "Sovereign by Design," its plan to become Asia's next data centre hub. 

Ten MoUs came out of that event, signed with organisations from the US, China, Japan, South Korea, and Singapore, plus a multilateral development bank, adding up to a pipeline of roughly 863 MW. NOVVA Group, a global clean-energy infrastructure platform, and Blaize Holdings, a US AI infrastructure firm now advising on Mongolia's national AI and data policy, are among the named signatories.  

Reading Between the Lines
Mongolia is making a specific bet: turn stranded energy into exportable value through computing rather than transmission. Roughly 80% of a data centre's operating cost is energy, so a data centre is really an energy project in a technology wrapper. Mongolia has coal and renewable capacity but has struggled to monetize it conventionally, since new coal plants are largely unfinanceable post-Paris and gasification is too slow and expensive.

Pairing renewables and hybrid generation with round-the-clock computing demand lets Mongolia sell that energy abundance over fibre instead of transmission lines it doesn't have. The cold climate adds to the math: Mongolian officials cite savings of up to 40% on cooling costs from the country's harsh winters alone, before cheap power even factors in.

The Case for Mongolia
The technical numbers hold up. Mongolia's renewable potential is estimated at 2.6 terawatts, far more than current domestic demand requires, leaving room to dedicate new solar and wind capacity to data centre load specifically. Dedicated hybrid generation is projected at 3–5 cents per kWh; Deputy PM Togmid Dorjkhand has cited this as undercutting the US (14–18 cents), South Korea (18 cents), and Japan (22–36 cents) by a wide margin.

There's also an actual site behind the pitch: Hunnu City, a 31,000-hectare development near Ulaanbaatar built around geothermal power, backed by the $1.4 billion Chinggis Khaan Sovereign Wealth Fund, which is actively recruiting developers. A Data Law is moving through parliament, and the government has added customs exemptions and a four-year VAT deferral on qualifying equipment.

The Hard Part
The government isn't building any of this itself. Its role is to clear the legal, tax, and land pathways and let private capital do the rest, which plays to Mongolia's real comparative advantage in energy and land rather than data centre operations. The MOU structure reflects that: NOVVA and Blaize bring operating expertise Mongolia doesn't have.  Financing is where the picture gets more nuanced. The 863 MW pipeline is meant to be funded primarily by the ten MOU partners themselves. The government's own target is to attract at least $2 billion, and officials cited a total financing figure closer to $16 billion for the full buildout at the closing briefing.

The one commitment that ties it all together is power delivery within 24 months, running alongside construction rather than ahead of it. That's aggressive, but it rests on a specific mechanism, private hybrid generation independent of Mongolia's already-constrained national grid, rather than a vague promise. 

The Road Ahead
The next two years are the real test. Parliament needs to pass the Data Law. The first dedicated power supply needs to arrive on schedule, since the entire model depends on it. A meaningful share of the ten MOUs needs to convert into signed financing and construction agreements. And the state needs to keep deploying capital through its own vehicles rather than treating COP17 as a one-off moment.

Mongolia has moved further and more coherently than most jurisdictions making a similar pitch: a real site, a sovereign financing vehicle, a legal framework already in motion, and ten international counterparties willing to sign before a shovel goes into the ground. Whether that turns into an actual data centre economy comes down to one number. If power shows up within 24 months, Mongolia has a genuine shot at turning an energy surplus most countries would envy into a growth pillar that doesn't depend on mining at all.

Presidents Khurelsukh and Xi Jingping Meet in Bishkek www.montsame.mn

Khurelsukh Ukhnaa, President of Mongolia, met with Xi Jinping, President of the People’s Republic of China, in Bishkek, Kyrgyz Republic, before attending the expanded meeting of the Council of Heads of State of the Shanghai Cooperation Organization (SCO).

The Heads of State recalled their previous meeting during the 2025 SCO Summit in China and the events commemorating the 80th anniversary of the end of World War II and the victory of the Chinese People's War of Resistance Against Japanese Aggression, where they exchanged views on a wide range of bilateral relations and cooperation issues.

The parties expressed satisfaction with the continuous expansion of the Comprehensive Strategic Partnership across all sectors and the strengthening of political mutual understanding and trust.

They commended the concrete results stemming from high-level agreements to advance cooperation in trade, the economy, cross-border railway construction, renewable energy, the environment, agriculture, and light industry.

Chinese President Xi Jinping congratulated Mongolia on successfully hosting the 17th Conference of the Parties (COP17) to the UN Convention to Combat Desertification.

The two sides agreed to increase bilateral trade turnover to USD 30 billion over the next five years.

They concurred on the importance of aligning future cooperation with long-term sustainable economic development and planning while deepening ties in industry, infrastructure, green development, mineral resources, and renewable energy.

The Heads of State underscored the critical trade and economic significance of establishing cross-border railway ports.

In this context, they exchanged views on completing the construction of the Gashuunsukhait–Gantsmod border port by 2027 and gradually commissioning the Shiveekhuren–Sekhee, Bichigt–Zuunkhatavch, and Khangi–Mandal cross-border railways.

President Khurelsukh expressed his gratitude to China for accepting Mongolia's request to purchase and supply petroleum products during a period of unstable fuel supply on the international market.

President Xi Jinping affirmed that China would continue to support the supply of petroleum products to Mongolia, despite global market instability driven by international geopolitical and geostrategic factors.

The parties also discussed Mongolia-China-Russia trilateral cooperation. Topics included modernizing and increasing the capacity of the Central Railway Corridor, routing a natural gas pipeline through Mongolian territory, and the construction progress of the Erdeneburen Hydropower Plant.

K-food finds booming new market in Mongolia’s convenience stores www.koreajoongangdaily.com

On Aug. 8, the area around the National Library of Mongolia in Ulaanbaatar was lined with Korean brands, such as convenience stores CU and GS25 and the bakery franchise Tous les Jours.

Inside one of those convenience stores, customers browsed the shelves for Korean snacks and soda, while others sat at tables and ate kimchi cup noodles and gimbap (seaweed rice roll). More than half of the products on sale at the store were Korean food items.

The tables, which could seat around 10 people, were particularly crowded, with hardly an empty seat.

“I usually buy something cold, such as ice cream or drinks,” a 17-year-old girl who was eating kimchi cup noodles said. “I come here every day because there are always new products.”

“Ready-to-eat meals such as lunchboxes and gimbap that can replace a full meal sell particularly well these days,” said a 24-year-old man who works at the convenience store.

Korea exported $110 million worth of food products to Mongolia last year, about 3.4 times the amount in 2020, according to Korea Agricultural Trade Information on Thursday.

Korean food exports to Mongolia grew at an average annual rate of 18.7 percent over the decade from 2015 to 2024, according to the Korea Chamber of Commerce and Industry. The figure far outpaced Korea's average annual growth rate of 8 percent for overall food exports.

Korea also exported 31,033 metric tons (34,208 tons) of beer to Mongolia last year, accounting for 30 percent of the country's total beer exports.

Korean instant noodle brands such as Nongshim, Paldo and Otoki hold a combined 70 percent share of Mongolia's instant noodle market, the Korea Trade-Investment Promotion Agency said. Kimchi exports to Mongolia reached $232,610 last year, about double the amount in 2021.

Convenience stores have played a major role as platforms for Korean food products. Korean food products are by far the best-selling items across the roughly 900 CU and GS25 stores currently operating in Mongolia.

One of the top-selling products in GS25 stores in Mongolia is Cafe25, the convenience store's private-label coffee, the convenience store said.

Korean beer, chicken skewers grilled with Korean-style sauces and gimbap varieties such as tuna and bulgogi are also popular.

At CU, popular products include its private-label coffee, tuna mayonnaise triangle-shaped gimbap, corn dogs made with Korean cheese and fried dumplings.

Korean F&B chains have also become key hubs for K-food consumption. Korean brands currently operating in Mongolia include bakery chains Tous les Jours and Paris Baguette, coffee chain Mega Coffee, fast-food chain Mom's Touch, Theborn Korea's Saemaeul Restaurant and Hong Kong Banjum 0410, as well as Kwon Gu Sung Sundaegugbab. Theborn Korea is a food and beverage company led by entrepreneur Paik Jong-won.

Mongolia's relative proximity to Korea also gives Korean companies an advantage. Global chains such as McDonald's and Starbucks have yet to enter the Mongolian market. As a landlocked country with no access to the sea, Mongolia relies heavily on air freight for essential food ingredients, resulting in high logistics costs.

Mongolia's large young population and its openness to new cultures and trends also play a role. About 60 percent of the country's population is aged 34 or younger, and many consumers are already familiar with Korean culture.

“Mongolia offers a favorable environment for Korean companies because it has many young consumers with a positive view of Korea,” Lee Chae-ho, a professor of business administration at Dongguk University, said. “As consumers incorporate K-food they first encountered through content such as Korean dramas into their everyday lives, it can create a virtuous cycle that further increases their interest in Korea.”

BY CHOI HYUN-JU, KO SUK-HYUN [kim.jiye@joongang.co.kr]

Ulaanbaatar rail freight bypass nears completion www.railwaygazette.com

Construction of a 127 km railway bypass to divert freight traffic including hazardous goods away from Ulaanbaatar is progressing rapidly, with test running scheduled to begin in September and full operation potentially starting by the end of the year.

The line will branch from the main line between the Russian border at Sükhbaatar and Ulaanbaatar at Emeelt, to the west of the capital. It will then bypass the city to the south, running through the Khushig Valley before rejoining the main line at Bagakhangai, southeast of Ulaanbaatar.

The route passes close to Chinggis Khaan International Airport, the Khushig Valley logistics area and the planned Hunnu City development.
The 1.2tr togrog project is being undertaken by national railway MTZ. It includes three passing loops, and bridges with a combined length of approximately 2.5 km. The longest bridge is a 476 m crossing of the River Tuul.

Construction began in April 2025 on the 87.9 km Bagakhangai – Khushig Valley section, where the government says that the main construction works have now been completed. Work on the Khushig Valley – Emeelt section began in 2026.

Once completed, the bypass is expected to remove up to 1 800 heavy lorries per day from Ulaanbaatar’s roads. It is initially designed to handle around 3.5 million tonnes of freight annually, with capacity potentially increasing to 20 million tonnes.

Iran, Mongolia FMs meet in Bishkek for SCO Summit www.en.mehrnews.com

Iranian Foreign Minister Seyyed Abbas Araghchi and his Mongolian counterpart Battsetseg Batmunkh met in Kyrgyz capital of Bishkek on Monday on the sidelines of the Shanghai Cooperation Organization (SCO) Summit.

During the meeting, the two top diplomats exchanged their views on host of issues, including bilateral ties, recent developments in the region and the issues of mutual interest.

The 26th Summit of heads of state of the Shanghai Cooperation Organization (SCO) kicked off in Bishkek on August 31 and will run through September 1, 2026 as Kyrgyzstan is the organization's periodical chair in 2026.

The slogan of this year’s summit is entitled “25 Years of the Shanghai Cooperation Organization: Together for Peace, Development, and Sustainable Prosperity.”

President Masoud Pezeshkian arrived in Bishkek on Monday to attend the Shanghai Cooperation Organization and Shanghai Plus Summit, where he is due to deliver a speech and hold bilateral meetings.

Upon his arrival, Pezeshkian was welcomed by Kyrgyzstan's deputy cabinet chairman. His two-day visit will be focused on the summit of heads of state from the Shanghai Cooperation Organization and Shanghai Plus, where he will speak and hold bilateral talks with a number of participating leaders and the presidents of Kyrgyzstan, Russia and Tajikistan on the sidelines of the summit. 

At the invitation of the Kyrgyz president, the Iranian president will also attend the official opening ceremony of the sixth World Nomad Games during the trip.

On the ground in Mongolia www.asiaasset.com

At 10°C in June in Ulaanbaatar, it was an unusually cold summer for me, arriving from Hong Kong for a research trip. But the chill in the Mongolian capital was quickly offset by the warm welcome from government officials, banks and companies alike.

A common theme emerged across my meetings: Mongolia is actively seeking to expand its access to international capital markets.

Mongolia is classified as a frontier market, also known as a ‘pre-emerging’ economy, reflecting its high growth potential, along the elevated risks that makes primary research essential.

The country has enjoyed robust economic development over the past three years, underpinned by strong commodity-led export growth. This has been accompanied by rising US dollar bond issuance from Mongolian issuers.

Against this backdrop, it was an opportune time to be in the ‘Land of the Eternal Blue Sky’, speaking with bond issuers face-to-face, observing first-hand how the economy is changing and understanding where companies are prioritising their future growth.

We met with six commercial banks for a pulse check on the country’s financial system. Bank lending has grown significantly over the past two years, fuelled by economic expansion; we expect the growth rate to remain strong in the mid-teens in 2026, albeit slower than before.

Lending focus has shifted towards small and medium-sized enterprises, which have historically faced a disproportionate lack of access to bank financing despite their importance to the economy and now face rising funding needs to meet growing domestic demand.

We were encouraged to see major Mongolian banks partnering with international financial institutions to help close the financing gap, particularly in sustainable lending.

Digitalisation was a recurring theme, cited by the banks as a common area of development spanning all channels — branches, mobile banking and online transactions. We believe this digital transformation will help Mongolian banks lower their operating costs while improving productivity and customer experience.

Most of the non-performing loans appear to have remained relatively well controlled. It was reassuring to hear that most commercial banks have taken active measures to manage the high-risk segments of their loan books, alongside regulatory tightening on excessive retail lending.

Mongolia’s growth ambitions cannot be realised without infrastructure development. As one local company puts it: “In Mongolia, almost every project proposal begins with an energy project.” A fitting reminder that this is a country with a vast territory and a sparse population.

The Mongolian government has identified energy security as one of its critical challenges and is determined to address it.

A highlight of the trip was a site visit to a power plant project located a couple of hours’ drive from Ulaanbaatar, which operates under a long-term power purchase agreement with the government.

Mongolia faces a critical energy shortfall, driven by surging consumption and ageing Soviet-era infrastructure. Nothing illustrated this more than the two power outages we experienced at our hotel during our stay in June, well before the surging power demand in winter.

We toured Phase 1 of the project to observe its operations firsthand. We saw the turbine hall and control room, the heart and brain of the plant, where power is generated. We also examined the chemical water treatment systems and the surrounding infrastructure, the arms and legs that keep the plant running.

The plant was built through bilateral cooperation between Mongolia and China with key Chinese stakeholders involved in the construction work and daily operations.

We then visited Phase 2, which is still under construction. Our discussions with the local construction team confirmed that the project is on track for delivery between 2027 and 2028.

Phase 1 was commissioned in 2025 but cannot fully cover the rising energy needs of Ulaanbaatar. Once fully completed, the project is expected to supply over a third of energy demand in the capital, a vital step towards bridging Mongolia’s energy supply gap.

We remain optimistic about Mongolia’s commodity-driven growth outlook in the near term. As local companies of varying sizes across a range of sectors look to improve their access to international capital markets, we expect Mongolian issuers to remain active in dollar bond issuance and to form a larger share of the Asian credit market.

From an allocation perspective, we favour issuers in strategically important sectors with meaningful exposure to Mongolia’s growth story.

Being on the ground is key to investing in emerging and frontier markets, providing first-hand insights and granular data points that no phone call or video meeting can give. On this trip, we could see and experience Mongolia’s growth potential first-hand. Just like its rapidly developing rail network, Mongolia is a frontier market on the fast track.

*Colette Zhou is investment manager of fixed income – Asia, at Aberdeen Investment.

President Khurelsukh Arrives in Bishkek for SCO Summit www.montsame.mn

Khurelsukh Ukhnaa, President of Mongolia, has arrived in Bishkek to participate as an observer in the extended meeting of the Council of Heads of State of the Shanghai Cooperation Organization (SCO) Member States, taking place in the Kyrgyz Republic from August 31 to September 1, 2026.

Upon landing at Manas-2 International Airport, the President was welcomed by U.E. Mamatkanov, Deputy Chairman of the Cabinet of Ministers of the Kyrgyz Republic and Chair of the Kyrgyz section of the Kyrgyz-Mongolian Intergovernmental Commission; Seitek Zhumakadyr uulu, Deputy Minister of Foreign Affairs of the Kyrgyz Republic; Tegshjargal Demchig, Ambassador of Mongolia to the Kyrgyz Republic, alongside other officials.

President Khurelsukh will deliver a speech at the extended meeting. Additionally, he will meet with the heads of state of SCO member and dialogue partner countries to exchange views on bilateral relations, cooperation, and issues of mutual interest.