Category
- Agriculture
- Automobiles and Machinery
- Bank, non banking financing, investment
- Blasting
- Construction
- Consumables
- Education
- Energy
- Engineer , Architecture and Geodesy
- Finance, Audit,Accounting and Brokerage
- Food
- Foreign Trade
- Geology Exploration
- Health
- Information Technology
- Insurance
- Labor Safety
- Legal and Business consulting
- Lighting
- Mining equipment
- Mining Services
- Other product and service
- Road
- Sewing and textile products
- Transportations
- Travel
Events
Mongolia nudges China to increase investments – this time not just in mining, but how about goats, too? www.scmp.com
Mongolia wants its biggest source of capital, China, to invest more in agriculture and tourism as the northeast Asian country tries to diversify its economy away from mining, an economic affairs official told the Post.
The largely impoverished country of just 3.4 million people has opened its doors wider to foreign investment in livestock – a critical asset in the world’s biggest landlocked country spanning an area bigger than western Europe.
And Mongolia is particularly looking to secure additional capital for meat processing, dairy farming and raising goats for cashmere, according to Tuvdendorj Gendendorj, the deputy minister of economy and development.
Mongolia is also more open to outside tourism investment, including for casinos, Tuvdendorj said during a video call. China, which already accounts for 80 per cent of Mongolia’s foreign trade, should be a top draw for capital in these sectors, he added.
“The China market is very strategic for us,” Tuvdendorj said. “Foreign investment, especially from China, is expected to increase.”
His assessment came after Mongolian President Ukhnaagiin Khurelsukh vowed during his China visit in November to jointly promote their comprehensive strategic partnership.
Agriculture, including forestry, accounts for 13.2 per cent of the US$15.3 billion Mongolian economy, the World Bank says. About 60 million livestock live in Mongolia, the bank says, offering considerable potential to “drive economic diversification”.
The most recent World Bank figures also put Mongolia’s total arable land at 1.34 million hectares (3.3 million acres) in 2020.
And Tuvdendorj says Mongolia currently has 260,000 hectares of arable land available for investment, offering “great potential for agribusinesses”.
Why is the Chinese government so concerned about food security?
Tourism makes up about 11 per cent of the country’s economy, and the Asian Development Bank says that sector should be worth US$2.1 billion by 2028, with 149,000 jobs. International visitor arrivals totalled 471,239 in 2017 and should hit 1 million by 2028, the bank’s data shows.
According to the Chinese Ministry of Commerce, cumulative Chinese investment in Mongolia totalled US$5.16 billion by the end of 2020, including US$70 million in 2020. This has mainly been scattered across mining, energy, construction, finance and livestock-product processing.
To facilitate foreign investment, the Mongolian parliament is considering changes to the country’s constitution to increase transparency and elect more members through proportional representation by next year.
Constitutional updates “would aim to treat domestic and foreign investments equally, with parliament able to ratify major economic projects” that create economic gains for Mongolia, Tuvdendorj said.
Mongolia has been rebuilding much of its economy for the past three decades, since the 1990 fall of a communist system dependent on the former Soviet Union. Mining, the flagship sector, continues to attract investment, but it comes with a growing list of regulatory and environmental issues.
China’s economic growth is “creating demand” for imported meat while paving the way for agribusiness, said Xu Tianchen, a China economist with the Economist Intelligence Unit in Beijing.
“Mongolia can potentially meet this demand by leveraging foreign investments to upgrade its husbandry and make the sector more export-oriented,” Xu said. “It also needs to import established practices and technologies to stem the degradation of pastures.”
Renewable energy in Mongolia “boasts ample resources” such as wind and sunlight, Xu added, while Chinese companies would come with a “technological advantage”.
China has already been focusing heavily on relations with Central Asia over the past year to grow more partnerships amid tense trade ties with the US.
President Xi Jinping held a two-day summit last week in Xian, Shaanxi province, with leaders from Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.
Mongolia also matters for China’s Belt and Road Initiative, noted Guilherme Campos the Shenzhen-based international business advisory manager with professional services firm Dezan Shira & Associates.
The belt and road is Beijing’s decade-long trade initiative to link economies into a China-centred trading network, largely by building large infrastructure projects abroad.
“China has significantly boosted its aid to Mongolia since [belt and road] was announced … and carried out several significant projects that were beneficial to the local social and economic growth,” Campos said.
BY Ralph Jennings
Ralph Jennings joined the Politcal Economy desk as a Senior Reporter in August 2022 having worked as a freelancer since 2011. Ralph previously worked for Thomson Reuters in Taipei and for local newspapers in California. He graduated from University of California, Berkeley with a bachelor’s degree in mass communication.
Published Date:2023-05-24
