Policy Brief Trilateral Relations Between Russia, China and Mongolia Written by Enkhjin Batbayar Policy Brief  Executive Summary My recommendations are that : In the case that whole Mongolia Focuses on, improve the policies on will not move to another side of the Neighboring countries; We have world or other planet , they should really long stories with our neighbors. work with their powerful and united Main thing is both of them are in same neighbors , more closely and more side. Now they become one of the active. I do not say that we should stop influential power of the world and our “Third neighbor policy” , it can be offered to help us to develop and solve our “Plan B.” You will see that if we economic issues. Friendly and close cooperate with our neighbors we can relationship with our neighbor will solve a lot of problematic issues such take us to the dream and will be the as “security threat , economic issues key to open the door of Mongolian and energy resources.” Development. Geographically, Mongolia is Time to realization of big sandwiched country between China opportunity for our future; It is and Russia , these are too powerful difficult to make huge economic than its country as a military power, decision for such a country like economically and so on. Which means sandwiched between only two if Mongolians cooperate with these its countries , sparely populated and neighbors , they can be really strength landlocked country. Especially the security wall for Mongolian external neighbor countries are more powerful threats. and developing processes are too fast when you compare with its country. Trade with China represents more They will not wait for us. The chance than half of Mongolia’s total external that develop our country is in our hand. trade. China receives more than 90 % Time flies , so we need to be fast and of Mongolia’s exports and is clear to make our decision. Mongolia’s largest supplier. Mongolia has relied on Russia for energy supplies , leaving it vulnerable to price increases , in the first 11 months of 2013 , Mongolia purchased 76% of its gasoline and diesel fuel and a substantial amount of electric power from Russia. A drop in foreign direct investment and decrease in Chinese demand for Mongolia’s mineral exports are putting pressure on Mongolia’s balance of payments.1 Chinese President mentioned that , China will respect the independence of Mongolia , will not participate internal affairs of Mongolia. Trilateral Relations between Russia, China and Mongolia Page 2  .Introduction Economic and Political interest on Mongolia Mongolia is located between two huge and powerful countries that Russia and In 2014 , Leaders of these two countries China. Geographically , third nearest visited to Mongolia in row and many analysts neighbor is Kazakhstan but its thirty think and say that it is the sign and offer to eight kilometers far away from west Mongolians that join their alliance and they border of Mongolia and also territory of will help them to solve problems such as an Mongolia is so big , it takes nineteenth economical and political , means that every place in the world rank , but population levels of state. of Mongolia is only 3 million, 1.3 million Last year , during the two- days state people are living in Ulaanbaatar which is visiting in Mongolia , President of China , XI biggest and most developed city , JINGPING spoke at Mongolian Parliament , economic development of its country is He said: “ No matter what changes may come more weaker than neighbors . After the in terms of international or regional conditions, collapse of USSR , relations between China will abide by the the Sino-Mongolian Russia and Mongolia get cold , Mongolia friendly cooperation treaty, respect the independence, sovereignty, territorial integrity started to look for third neighbor such as of Mongolia, respect Mongolia’s own United States , Japan , South Korea and development path. This is a policy we will European Union which are now having always uphold.”2 complicated relation with Russia after the Ukrainian Crisis. About China , there Purpose of visiting about Russian President was firstly economic agreements , second visa- is deep hate between Mongolia and free movement between Russia and Mongolia. China. China re - recognize the they totally signed 13 agreement , trade independence of Mongolia in 1949 under development between Russia and Mongolia to the pressure of Soviet Union. But during reach $ 10 billion by 2020 , exports to Russia the post – cold war era , China took a without tax or customs for next 20 years , the steps that normalize the relationship main strategically important agreement was development of Ulaanbaatar Railways. of between Mongolia , now the China is the course between these agreement , there is a biggest trade partner of Mongolia. traditional help that Russia will provide military – technical grant to Mongolia. And This policy brief aims how to use our also many analyst asking that “why did he visit geographical advantage , which choice Mongolia , Ukrainian crisis already hanging will takes first place in our diplomatic over his head” , also whole world surprised relations , realization that now is the that when one of the most powerful leader right time to choose our future cried in front of the audience. It is still question mark , maybe he showed world that economical and political policies with we are still brothers , our relation is more our powerful neighbors. deeper and closer than any other. This document focuses on the dynamic Finally , if summarize the visiting of leaders of the Russia- China relationship and of these two countries , main purpose was to explores possible implication for the offer us the opportunities that we have and Mongolia. There are really deep and long know the position of Mongolian President stories behind the relationships between Tsahia Elbegdorj , show the world that these countries that historically , Mongolia is still on our radar , we will keep politically and economically , and it will work together , our friendship with Mongolia answer the question that why should is different than other countries and in the end Mongolians join the alliance of these two they reminded us that our future fully depend countries. And it primarily intends to on trilateral relationship between Russian , policy-makers , Mongolian Government , China and Mongolia. Ministry of Foreign Affairs and Non – Governmental Organizations. Trilateral Relations between Russia, China and Mongolia Page 3  Soft Alliances After the Ukraine Crisis , relationship Last Victory Day Parade shows the world how between China and Russia got into new level , thick is relationship between Russia and China. they signed series of new deals , including a $ 400 billion deals to export gas to China last May. Taking a Crimea affected positive way to Russian geopolitical and natural resource advantage. This big event made a big change that relationship between Russia and the West , they call this cooperation between China and Russia as a “Soft Alliance”. This cooperation pushed the Westerns to the same corner , for example one analyst who is Alexander Gabuev wrote on his research paper like , “The developing relationship between China and Economic development with China Russia could provide Putin with a way to undermine the effect of sanctions and may also China already buys more than 90 percent of help Beijing become even more assertive both Mongolia's exports, mainly of coal and copper, regionally and globally. In the long term, Two-way trade was worth $324 million in current developments could make Russia even 2002 but rose to $6 billion in 2013 and 49 more dependent on China. The EU has two percent of foreign enterprises registered in options: to work with the United States to Mongolia are Chinese, as we can see Mongolia increase the pressure on Russia by sanctioning already economically depended on China. 4 Chinese companies that do business with It means if Mongolians break the peaceful sanctioned Russian entities and individuals; or, relationship with China , it will bring them alternatively, to try to undermine the such a huge economic crisis and big risk of increasingly close relationship between political level , I mean there is a possibility to Moscow and Beijing by encouraging other they may lose their independence. Asian countries such as Japan and South Korea to co-operate with Russia in order to decrease its dependence on China.”3 According to this research paper it is the big chance for Mongolia to develop the relations between neighbor countries. Rapidly developing and widening cooperation of these two countries may change the world map and divide two sides again. Recently events such as , firstly cancellation of G8 summit that was scheduled in Russia , after that Russian Federation kicked out from G8 summit , they assembled without Russia , second one is But on the one hand , China is one of the Russia holds chair of BRICS ( Brazil , Russia , biggest industrial country in the world , always India , China , South Africa) summit in July being hungry with copper and coal , on the other hand Mongolia has big natural resource 2014 , these countries simply represents 3 such coal, copper, fluorite, gold, iron ore, lead, billion people which is 40 percent of World molybdenum, oil, phosphates, tin, uranium, Population and the five nations have a and wolfram. If Mongolians keep work with combined nominal GDP of US$16.039 trillion, China in mining area , it will be the beginning equivalent to approximately 20% of the gross of huge economic development for world product. These event shows that world Mongolians. ` power is shifting. Trilateral Relations between Russia, China and Mongolia Page 4  Chinese President Xi Jinping , during his Mongolian Coal Production by Year state visit in Mongolia , both sides signed on significant agreements such as mining and financial cooperation , for Mongolians most important deal was about rail way transition agreement that network to deliver coal and other minerals to the China. Building a road , railway and pipeline would increase the role of Mongolia and make them “transit corridor” to linking a China and Russia. Oyu Tolgoi , Tavan Tolgoi are Mongolia’s biggest mining companies that near to Chinese border. According to the report of Mongolia’s Year Production % Change the biggest mining company of Oyu Tolgoi , Turquoise Hill mined 589,00oz of gold and 2009 16.026.50 42.33% 148,000t of copper in concentrates last year 2010 27,868,64 73.89% and expects to produce 600.000oz-700,000oz of gold and 175,000t to 195,000t of copper in 2011 35,227.67 26.425 concentrates in 2015. -In Q1’14, Oyu Tolgoi produced 102,900 2012 37,048.68 5.17% tonnes of copper-gold concentrate containing Source: United States Energy Information 25,300 tonnes of copper Administration -Oyu Tolgoi recorded net revenue of $108,0 million in Q1’14 on sales of approximately 48,200 tonnes of copper-gold concentrate No worries to Energy Issues with Source: Russia http://www.turquoisehill.com/s/Oyu_Tolgoi.as p Mongolians see Russians as a ”Brother.” Their road to passed together is too long and And also not only export the crude coal and full of trust. They did not leave or sell each copper , we should support the industries and export the products that made in our country other during the difficult times such as Battle will cost more. of Khalh Gol , Great Patriotic war and so on. Maybe many people see this help as a political . purpose or prove to the world that theory of Mongolian Copper Production by Year Leninism , but it does not matter purpose their help , we could not declare out independence , unaided of Russian Brothers. During the Post – Cold war era , Mongolia was taking orders from Moscow , politically and economically depended on Soviet Union. Nowadays Mongolia still is depended on almost all of its gasoline and diesel fuel and Year Production Unit % much of its electricity. Measure Change 2005 126547 Metric tons -4.13% 2006 129693 Metric tons 2.49 % 2007 130160 Metric tons 0.36% 2008 129500 Metric tons -0.51 % Source: United States Geological Survey (USGS) Minerals Resources Program Trilateral Relations between Russia, China and Mongolia Page 5  In 2000 , Russian president Putin visited Trilateral Relations between Russian Mongolia , both sides signed on the agreement Federation , The People’s Republic about build on oil pipeline from Siberia to China through the Mongolia. This project is of China and Mongolia not only about lucrative transit fees , In September 2014, on the sideline of the at the same time it also guarantee stable oil Shanghai Cooperation Organization (SCO) , supplies for Mongolia. But project was delayed there was meeting between presidents of due to problems in negotiations among the China, Russia and Mongolia. In the summit , parties involved. In March 2009 , the Rosatom Sate Nuclear Energy Corporation and the Mongolia Department of Nuclear Energy signed on documents that nuclear power generation and uranium production. Recently in 2010 , two sides signed on another several key agreements , this joint planned to product 2000 tons per year , which will be a major boost for Mongolian economy given the fact that Mongolia has uranium reserves of some 62,000 tons , placing it among the top 15 countries in term of reserves. Keeping the Mongolian President Tsahia Elbegdorj peace with Russia gives the Mongolia conveys that Mongolia wants to take a following advantages. For Example: (a) advantage position in Sino – Russian economic geopolitical relationship with Russia that has relation. On the other hand , his two powerful always been an important element of neighbors did not process with transportation Mongolia’s security; (b) Mongolia needs and energy cooperation without taking into Russia for the supply of energy and many account the role of a mineral-rich Mongolia. other daily commodities, such as sugar and edible oil; and (c) Russia’s forceful role in President Xi proclaimed that the trilateral Eurasia is of great significance to Mongolia as summon it was of “Great significant to it seeks to be connected to Europe. 5 deepening mutual trust among the three parties At the same time Russia helps for and pushing forward regional cooperation in improvement of Mongolian military power. Northern Asia.”6 Every year joint military training takes a place During the first formal trilateral meeting in Russia and Mongolian cooperation since between heads of Russian Federation , 2008. People’s Republic of China and Mongolia , in As we can see there are a lot of cooperation Dushanbe , Tajikistan , President Vladimir and joint project between Russia and Putin said “…Naturally , the geographic Mongolia. If Mongolian government focus on proximity of Mongolia , Russia and China help relationship between its neighbors , they can us implement beneficial long – term projects in solve most sensitive and problematic issues infrastructure , energy and mining. We have that related with national security. things to discuss and we find it important , feasible and useful to establish a regular dialogue… Also , our future perspective of joint cooperation is considered on organizing joint works based on modernization of the UBTZ(Ulaanbaatar Railways JSC) and its Trilateral Relations between Russia, China and Mongolia Page 6  parts stretched on Russian and Chinese Mongolian’s most influential “Third territories. We are also acknowledged about Neighbor” is United States of America. The Silk Road Project and it can be tied up with during period of Bush administration , at least other Russian projects. ”7 they kept the eye on this huge territory but sparely populated country. Even the president From this speech you clearly can see that of US visited Mongolia in 2005 , it was short they eager to co – operate with each other , as but significant visiting for Mongolians. But he mentioned that connection of three after Barack Obama came to the power , countries with railway is big boom for Mongolia simply disappeared from their radar. Mongolians in economy and it can be big Secretary of State Hillary Clinton has not even chance for landlocked country such as us go looked that way on any one of her frequent out to sea. Asian-blitz-tours. After the SCO meeting President Tsahia But many analysts say that “Third Neighbor” Elbegdorj announced that Ulaanbaatar would policy complicates the trilateral relations host the implementation The Railway Transit between Russia , China and Mongolia. Transportation agreement just signed on these three government and set up a working group References to study linking Central Asia’s natural gas 1 fields to China and South Korea through CIA World Fact book, August 23 2014, Available:http://www.indexmundi.com/mongo Mongolia via Russia’s “Western Corridor of lia/economy_profile.html Natural Gas.”8 2,4 Xixin, Stronger bilateral relations between Third neighbor policy China and Mongolia , August 23 2014, http://www.guildfordcoal.com.au/wp- Mongolia is the landlocked country that only content/uploads/2014/08/stronger_relations.pdf bordering two countries. After the break down of Soviet Union , Mongolia adopted “Third 3 Alexander Gabuyev, A “SOFT ALLIANCE”? RUSSIA-CHINA RELATIONS AFTER THE Neighbor” policy , started to seek for political , UKRAINE CRISIS, http://www.ecfr.eu/page/- economical and cultural partners such as /ECFR126_-_A_Soft_Alliance_Russia- United States of America , European Union , China_Relations_After_the_Ukraine_Crisis.pd Japan , South Korea , other Asia pacific f countries and various international 5 Dr. Sharad K. Soni, Russia and Mongolia organizations. recent upsurge in ties , http://www.jnu.ac.in/SIS/MakingSISVisible/P Russian Leader Vladimir Putin came to the ublications/S.K.%20Soni- power , he re – activate relationship with %20Russia%20&%20Mongolia%20DSA.pdf Mongolia , and in 2003 , he wrote off approximately 98% of huge dept of Mongolia , 6 “China, Russia, Mongolia to Create it was about 11 Billion dollar (7,3 billion Economic Corridor,” thebrickspost (September pounds)and owed from Soviet era. During the 12, 2011) 7 N.Khaliun, Mongolian delegation to visit power of The Mongolian’s People Russia, 2014, Revolutionary Party , one of the influential http://mongoliaeconomy.blogspot.cz/2014/09/ head of the party was Nambar Enkhbayar , he mongolia-brief-september-12-2014-part- served as prime minister (2000-2004) and iv.html president (2005-2009) , personal relation 8 between Vladimir Putin and Nambar Elbegdorj speech, website of President of Mongolia (September 11, 2014) Enkhbayar was good , but after Democratic Party came to power (Since 2009), relationship with Russia cooled again , Third Neighbor policy strengthened once more again. (Word count 2929) Trilateral Relations between Russia, China and Mongolia Page 7