Mongolia’s flag on the high seas www.news.mn

Mongolia is land-locked country, nevertheless, it has its own maritime law. Under the international rights of landlocked countries to fly their own flag on the high seas, Mongolia has been operating an open ship registry in Singapore since 2003.

Partnership of MIAT and Korean Air brought to new level www.montsame.mn

Ulaanbaatar /MONTSAME/. MIAT Mongolian Airlines and Korean Air, flag carriers of Mongolia and South Korea established a memorandum of understanding with the purpose of air transport development, flight network expansion and promotion of competitiveness within the framework of the air communications agreement between the Government of Mongolia and the Republic of Korea signed last January. Executive Director of MIAT D.Battur and Co-Rep Director and Vice President of the Korean Air Lines Co Ltd Kee-Hong Woo signed the document.

Ministers meet representatives of Asian Infrastructure Investment Bank www.montsame.mn

Ulaanbaatar /MONTSAME/ Minister of Construction and Urban Development Kh.Badelkhan on October 28 met with a delegation led by Konstantin Limitovskiy, Senior Advisor to the President and Chief Programming Officer at Asian Infrastructure Investment Bank (AIIB).

Shanghai helps fuel Tesla's electric car dreams www.chinadaily.com.cn

Tao Lin, vice-president of Tesla Inc, was right when she said the US electric carmaker had made the right choice in 2018 by choosing to build its first overseas plant in Shanghai.

"Thanks to the outstanding business environment in Shanghai, many of our innovative ideas have become realities. From what we have achieved, it is a correct choice," Tao told reporters on Tuesday in Shanghai.

Tesla's Shanghai story is more than just innovative. The plant broke ground in January 2019 and started trial production in October, without CEO Elon Musk pitching a sleeping bag in the factory to supervise the progress, as he frequently did in the US.

To cap it, the $2 billion plant was around 65 percent less expensive to build than its Model 3 production system in the US, said Tesla in its third-quarter financial statement.

Tao said the plant will soon start production of its Model 3 sedans after it goes through final approval procedures. "They will be world-class," she said. The initial capacity will be 3,000 cars a week and deliveries would start in the first quarter of 2020.

Bookings for the model, with a mileage of 460 km, started from Friday at a list price of 355,800 yuan ($50,398). Tesla is also offering two other versions of Model 3 sedans that are imported from the United States.

"China is by far the largest market for mid-sized premium sedans. With Model 3 priced on par with gasoline powered mid-sized sedans, we believe China could become the biggest market for Model 3," Tesla said in its quarterly financial statement.

The prospects are not limited to the Model 3 alone. Despite a 25 percent import duty, the country is already the company's second-largest market, just behind the US and ahead of Norway and the Netherlands.

Tesla's third-quarter financial statement shows that its sales revenue in China surged 64 percent to $669 million in the quarter, while the figure in the United States fell 39 percent to $3.13 billion.

Bloomberg estimated that the US demand will probably cool as federal tax credits for Tesla cars expire, but China's market for electric cars has remained strong since it overtook the United States as the world's largest new energy vehicle market in 2015.

Statistics from the China Association of Automobile Manufacturers show that their sales totaled 872,000 units in the first three quarters of this year, up 20.8 percent year-on-year, despite the overall car market declining for 15 months in a row.

Yale Zhang, managing director of Shanghai-based consulting firm Automotive Foresight, said the arrival of localized Tesla models is of great significance.

The plant sends a clear signal of the country's intent to further open up its automotive industry to the world and will be the country's first fully foreign-owned car manufacturing facility.

China decided to allow establishment of such units in 2018 in the new energy vehicle sector and plans to allow the same in commercial vehicles and passenger cars by 2020 and 2022.

"China said it and has kept its word," said Zhang.

He said Tesla will also help improve the competitiveness of local new energy vehicle makers by forcing those incompetent ones out of business, some of which have been over-reliant on the government's financial stimuli, and inspire serious and ambitious companies to do a better job.

Ma Fanglie, president of BJEV, China's most popular electric car brand, said Chinese companies have something to learn from Tesla.

"It is not eligible for subsidies in China but its sales have been impressive. That's because its products offer great experiences that draw wows from its customers. We should develop such products as well," he said at an industry forum earlier this month.

116 thousand households in Ulaanbaatar to enjoy nighttime electricity tariff discount www.montsame.mn

Ulaanbaatar /MONTSAME/. As an effort to reduce urban outdoor air pollution, discount for nighttime electricity tariff for Ger dwelling areas is applied from every November 1 to April 1.

Special Operation: some 1000 Chinese citizens held www.news.mn

29 October night, in a special combined operation, the Mongolian authorities detained around 1000 Chinese citizens in four hotels in Ulaanbaatar. According to our sources, the National Police Agency, the General Intelligence Agency and Mongolian Immigration conducted a joint special operation. The Chinese citizens, who are now in custody, are suspected of financial swindle at the ‘Amar’ and ‘Oriental’ Hotels in the Bayanzurkh District of the capital, as well as the ‘Kentavr’ Hotel in the Bayangol District and the ‘Union’ Hotel in Sukhbaatar District.

Platform for Asian dairy manufacturing to be established in Mongolia www.montsame.mn

Ulaanbaatar /MONTSAME/. As there is a necessity to develop sustainable animal husbandry in the agricultural sector, a meeting was organized to introduce the sustainable development plan for animal husbandry to international organizations and investors on October 29.

Mongolia’s B3 stable credit profile balances external, fiscal risks with strong growth prospects www.moodys.com

Singapore, October 31, 2019 GDP growth has accelerated, but will moderate following slowing exports and shifting demands
Challenges remain around structural reforms, which could be credit negative if progress slows
Moody's Investors Service says in a new report that the credit profile of Mongolia (B3 stable) balances the country's high external and liquidity risks against its strong medium-growth prospects stemming from the extraction of plentiful natural resources.

"While Mongolia's economic growth has significantly accelerated over the past two years, supported by commodity exports and investment, we expect GDP growth to moderate to 6.2% and 5.5% in 2019 and 2020 respectively, from 6.9% in 2018," says Anushka Shah, a Moody's Vice President and Senior Analyst.

Slower export growth, driven by a moderation in China's economy (A1 stable) which absorbs more than 90% of Mongolia's exports, and the shifting demand and supply dynamics for coal and copper – which are Mongolia's main mining exports – are the key factors behind the country's declining pace of growth.

Domestically, while Mongolia has executed significant fiscal and monetary tightening since 2017, its progress on structural reforms has been mixed. In particular, delays in the disbursement of a sixth tranche of funding under an IMF program point to entrenched institutional constraints with the potential to undermine financial stability.

In addition, Mongolia remains reliant on continued external funding flows, and its external position could come under pressure as external debt repayments start to come due in 2021.

Moody's conclusions are contained in its credit analysis on Mongolia, which examines the sovereign in four categories: economic strength, which Moody's assesses as "low (+)"; institutional strength "low (-)"; fiscal strength "very low"; and susceptibility to event risk "high (-)".

Subscribers can access the report "Government of Mongolia – B3 stable: Annual credit analysis" at: http://www.moodys.com/researchdocumentcontentpage.aspx…

NOTE TO JOURNALISTS ONLY: For more information, please call one of our global press information hotlines: New York +1-212-553-0376, London +44-20-7772-5456, Tokyo +813-5408-4110, Hong Kong +852-3758-1350, Sydney +61-2-9270-8141, Mexico City 001-888-779-5833, São Paulo 0800-891-2518, or Buenos Aires 0800-666-3506. You can also email us at mediarelations@moodys.com or visit our web site at www.moodys.com.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

Anushka Shah
VP-Senior Analyst
Sovereign Risk Group
Moody's Investors Service Singapore Pte. Ltd.
JOURNALISTS : 852 3758 1350
Client Service : 852 3551 3077

Gene Fang
Associate Managing Director
Sovereign Risk Group
Moody's Investors Service Singapore Pte. Ltd.
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2019 Mongolia Economic Forum launched to boost sustainable development www.xinhuanet.com

The 2019 Mongolia Economic Forum kicked off here Wednesday to discuss the sustainable development of the country's economy at a time when poverty remains a pressing concern.

Mongolia’s Tavan Tolgoi Said to Ramp Up Work on $1 Billion IPO www.bloomberg.com

Mongolian state-owned coal miner Erdenes Tavan Tolgoi JSC is ramping up work on a planned Hong Kong initial public offering that could raise more than $1 billion, people familiar with the matter said.
The coal miner has hired an adviser to oversee preparations
for the share sale, including the underwriter selection process,
said the people, who asked not to be identified as the
information is private. The company has been interviewing banks seeking a role on the IPO and targets a listing as soon as next year, the people said.
A successful IPO would mark at least the third effort to
raise money to develop the Tavan Tolgoi mine after international partnerships failed in 2011 and 2015. Mongolian lawmakers in 2018 approved a plan to sell up to 30% of Tavan Tolgoi mine.
Deliberations on the share sale are at an early stage and
details including size and timing may change, the people said.
Representatives for Mongolia’s Ministry of Mining and Tavan
Tolgoi didn’t immediately respond to requests for comment.
Tavan Tolgoi, which means “five hills,” refers to the
original location of the coal ore, according to its website.
Tavan Tolgoi coal mine, located in the Gobi desert, is the
largest coal ore in Mongolia. Its deposit is estimated at a
total of over 6 billion tonnes of coal, and more than one-third
of which is high-grade, hard-coking coal, the website said.
Mongolia has been hopeful of a share sale of Tavan Tolgoi
since the country started exporting coal to China in 2011. A $3
billion international share sale plan for 2012 didn’t
materialize after Ulaanbaatar changed its plans for investment
in the coal mine. An attempt to shore up $4 billion investment
from a consortium including China Shenhua Energy Co. and Japan’s Sumitomo Corp. fell through in 2015 after the parliament stepped in saying it needed to review terms of the deal.