Amidst the New Year’s celebrations and political tumult in Ulaanbaatar (South China Morning Post, December 6, 2018), Chinese Ambassador Xing Haiming published a long seasonal greeting in the Mongolian media (Montsame, December 21, 2018). His message to the landlocked, Northeast Asian host country on the one hand focuses on describing all the successful bilateral initiatives to date. But on the other hand, it is also aspirational and prescriptive, highlighting what Beijing’s Chinese Communist Party (CCP) wants from Mongolian leaders. Though a customary, annual tradition by Chinese ambassadors serving in Ulaanbaatar, Haiming’s recent New Year’s message interestingly goes far beyond previous years’ greetings, including in its attempts to soothe brewing anti-Chinese feelings within Mongolian society (News.mn, January 3, 2018).
According to the Chinese ambassador, as long as Mongolia continues to respect the “One China” policy, bilateral relation will remain highly regarded in Beijing. The Chinese government, as reiterated during President Xi Jinping’s visit to Ulaanbaatar in August 2014 (Udriin Sonin, August 22, 2014), pledges to respect Mongolian independence, sovereignty, and territorial integrity as well as the country’s chosen democratic developmental path. In the past, China had raised concerns about Mongolia’s policy toward the Dalai Lama (Tibet) and Taiwan; but this year, the Chinese ambassador’s list includes Uyghur Xinjiang, a region with strong cultural links and gradually growing economic ties to Mongolia’s western regions. Mongolian leaders openly commit to recognizing the “One China” policy. Yet, they face enormous domestic political pressure regarding support for the Dalai Lama, the highest-ranking monk of Tibetan Buddhism, a version of which is the dominant religion in Mongolia. The Dalai Lama’s last visit to Mongolia, in November 2016, triggered a harsh reaction from Beijing and a long chill in relations (Fmprc.gov.cn, November 22, 2016; South China Morning Post, December 22, 2016; XinhuaNet, January 24, 2017).
For many Mongolians, the revival of Buddhism symbolizes the country’s full sovereignty from Russia and its recovery of spiritual freedom since 1990. At the same time, Mongolian elites have allegedly engaged in secret campaigns to encourage the Dalai Lama to recognize a Mongolian as the tenth Jebstundamba Khutukht, who would serve as the country’s religious leader (Tibetan Review, January 26, 2017). Furthermore, unofficial accounts suggest that several thousand Mongolian pilgrims visit Tibetan Buddhist holy sites in India every year (Hindustan Times, April 25, 2018). Although the CCP has been attempting to revive former Buddhist centers in Inner Mongolia to attract Mongolian pilgrims and monks (The Island, February 14, 2006; Archives-ouvertes.fr, November 24–28, 1999), the Dalai Lama issue is still likely to remain a challenge for Sino-Mongolian relations. Indeed, any attempts to repress or control domestic religious affairs to suit Beijing’s wishes would be politically far too costly for Mongolian leaders, even though many of them are aware of China’s prodigious economic leverage over the country.
In his New Year’s message, Ambassador Haiming conspicuously does not rank any Belt and Road Initiative (BRI) projects near the top of his economic wish list for the upcoming year. Rather, he expresses hope that the Mongolian authorities may soon issue operating licenses for Chinese banks and expedite the negotiations on a Sino-Mongolian free trade agreement. Three Chinese financial institutions—the People’s Bank of China (PBOS), the Industrial and Commercial Bank of China (ICBC), and the Export-Import Bank of China (EIBC)—have recently opened local offices in Ulaanbaatar. Moreover, the PBOC established a currency exchange swap mechanism and has continued to propose options for debt swaps. But the Mongolian parliament has been reluctant to approve the needed legislation since 2012. Many in Ulaanbaatar openly oppose extending local operating licenses to Chinese banks (Niss.gov.mn, November 11, 2018). Although the bilateral free trade discussions are quite recent, China wants to expedite the process over Mongolian hesitancy to do so (Niss.gov.mn, April 13, 2018). This further exacerbates the difficult situation Mongolian authorities find themselves in as the Kremlin has begun pressuring Ulaanbaatar to join the Russia-dominated Eurasian Economic Union (TASS, June 9, 2018).
In terms of economic matters, coal exports from the Tavan Tolgoi mine remain the foremost issue on the minds of Mongolian politicians. This massive coking coal deposit is considered the country’s most lucrative business. But working conditions in and around the mine are extremely dangerous. Plans to build a new 250-kilometer railroad from the mine to a Chinese processing factory remain stalled, which means the Mongolian coal has to be transported by thousands of trucks each year, resulting in 50 road deaths since 2010 (Ikon.mn, November 1, 2018). The state-owned Erdenes Tavan Tolgoi company is also the target of numerous corruption and embezzlement allegations. In his New Year’s address, Ambassador Haiming promises to do whatever possible to support continued coal exports to China from Tavan Tolgoi, despite Beijing’s shifting policies regarding coal imports and the steel industry (Montsame, December 21, 2018).
The limited attention the Chinese ambassador gives to BRI projects in Mongolia is quite notable and seems to undermine years of intergovernmental discussions on the matter, including the previously announced China-Mongolia-Russia Economic Corridor (see EDM, October 15, 2018). Meanwhile, Russia is reluctant to expose its own railways to too much regional competition, while Mongolia is concerned about Chinese economic dominance. Therefore, substantial near-term Chinese investment in Mongolian transit infrastructure will probably remain limited to constructing new highways or, possibly, two short rail links to mines near the Sino-Mongolian border.
The most extensive and far-sighted element in bilateral relations appears to be the institutionalization of cultural exchanges. According to Ambassador Haiming, the two countries have established a joint board on humanitarian exchanges. Second, his address notes the construction of a state-of-the-art Chinese Cultural Center, three Confucius Institutes and multiple Confucius classrooms across Mongolia. Third, he cites cultural exchanges (e.g., youth exchanges, governmental scholarships, media visits), which have become regular and well-known activities. At the same time, the CCP is seemingly relaxing its attitude toward increased cultural exchanges with Chinese provinces populated by Mongolian co-ethnics—namely, Inner Mongolia, Jilin and Gansu (Montsame, December 21, 2018).
The Chinese envoy’s 2018/2019 greeting does not leave out the CCP’s wish that Mongolia become a full member of the Shanghai Cooperation Organization (SCO), but he notably dropped his earlier insistence that Ulaanbaatar change its visa regulations for Chinese tourists. In the past, both issues have tended to trigger anti-Chinese rhetoric and fears of Chinese takeover and dominance among Mongolians. Thus, this latest example of public diplomacy toward Mongolia shows a growing sophistication in how China relates to its smaller Asian neighbors.