Mongolia’s parliament has ratified a deal with China to jointly construct a new cross-border rail connection between the two countries, as it looks to forge closer ties with its southern neighbour amid US President Donald Trump’s tariff war.
Construction of the 19.5-kilometre (12.1-mile) railway – which will allow Mongolia to ramp up its coal exports to China – had been held up for over a decade, but the project has gained fresh momentum in recent months.
Gantumur Luvsannyam, Mongolia’s first deputy prime minister, told the Post in an interview earlier this year that the intergovernmental agreement with China was “one of the top items in the agenda”.
“Construction work will start this year and it’ll be completed in 2027,” he said, adding that coal terminals on both sides of the border would also be completed by then.
The move is the latest in a series of steps forward for China’s attempts to build a pan-regional rail network to boost ties with its neighbours.
The country is also working on a 523km railway extending to Kyrgyzstan and Uzbekistan in the west, as well as high-speed links with Vietnam and Thailand in the south.
The Mongolian project – known as the Gashuunsukhait-Gantsmod cross-border railway – had previously been delayed due to the slow development of Mongolia’s rail industry and some misunderstandings regarding the day-to-day operation of the railway, according to Luvsannyam.
But Mongolia now appears to be prioritising the new line as it looks to strengthen its economic independence by boosting coal exports.
Sumiya Chuluunbaatar, a non-resident fellow at the Mongolian Academy of Sciences’ Institute of International Studies, said that the project would lead to “increased trade” with China and “could be seen as a step towards economic stability”.
“Against the backdrop of Trump’s protectionist policies potentially disrupting global trade, the cross-border railway agreement appears to be a strategic move for Mongolia to support its economy, particularly by strengthening trade with China,” he noted.
Mongolia exported a total of 83.7 million tons of coal last year, official data showed. Once operational, the cross-border railway is projected to increase the country’s coal transport capacity by 30 million tons, allowing Mongolia to maintain an economic growth rate above 6 per cent.
“The ratification demonstrates the unanimous support across the parliament for this project,” said Prime Minister Oyun-Erdene Luvsannamsrain in an official statement.
“This partnership is unlocking valuable export and investment opportunities, opening Mongolia’s natural resources to drive new investment into the country.”
China is by far Mongolia’s largest trading partner, receiving 91.3 per cent of the country’s exports and supplying 40 per cent of its imports in 2024, according to Mongolian customs data.
BY: Kandy Wong
Kandy Wong returned to the Post in 2022 as a correspondent for the Political Economy desk, having earlier worked as a reporter on the Business desk. She focuses on China's trade relationships with the United States, the European Union and Australia, as well as the Belt & Road Initiative and currency issues. She graduated from New York University with a master's degree in journalism in 2013. An award-winning journalist, she has worked in Hong Kong, China and New York for the Hong Kong Economic Journal and the Financial Times, E&E News, Forbes, The Economist Intelligence Unit, Nikkei Asia and Coconuts Media.

Published Date:2025-04-08