China has traditionally viewed its relations with the Mongols to its north with much seriousness. Chinese policymakers in the 21st century are fully aware of the historical record of devastating invasions of the Chinese heartland from the Mongolian plateau, and such memories are still significant when developing policy. Both Chinas—People’s Republic of China and the Republic of China (ROC) on Taiwan—now to some extent “recognize” the independent state of Mongolia, but there are caveats. The PRC has often published official maps which include the territory of Mongolia within its borders, and it is very nervous about how democratic politics in independent Mongolia may influence its restive Inner (or Southern) Mongolian minority of 6 million.
On Taiwan, the Mongolian and Tibetan Affairs Commission, which is directly descended from the Manchu Li Fan Yuan (Office of Barbarians) still functions, although formally goes out of existence in 2006.  Since 2002 Taiwan has permitted Mongols to use their own passports to come to the island, but until the ROC Constitution, which claims Mongolia as a sovereign part of China, is amended, no completely normal relationship is possible. All Chinese realize that Mongolia recognizes one China, the PRC, and does not officially support any Pan-Mongolian or Southern Mongolian independence movement (although doubts about the real attitudes of Mongols still remain).
PRC foreign policy analysts and policymakers always have believed that China rightly should be the preeminent Asian regional power, viewing its weaker neighbors with condescension. Tensions with neighbors traditionally were a threat to China’s national security. With the opening of China in the 1980s and the end of the Cold War, China developed a “good-neighborly” integrated regional policy (mulin zhengce).  According to Liu Huaqiu, Director of the Foreign Affairs Office of the State Council, the objectives of this policy were to develop friendly relations with neighbors, preserve regional peace and stability, and promote regional economic cooperation. For China, achieving economic growth and becoming an economic power are both a means and an end of its foreign policy. Therefore it was necessary to settle remaining border disputes peacefully and prevent alliances of neighbors with hostile foreign powers, including Russia, Japan and the U.S. “In other words, establishing good relationships with neighbors is aimed at providing China with a more secure environment in its periphery as a leverage to increase its influence in world affairs.” 
A major influence on Chinese thinking about Mongolian relations was the souring of economic relations with western countries after the 1989 Tiananmen incident. Because of sanctions, China was forced to turn its attention to developing political and economic relations with its border neighbors, who were very concerned about a potential breakdown of the Chinese state leading to their own economic misery. China saw three trends which favored it developing a “comprehensive periphery policy”: (1) the 21st Century would be the Pacific Century of fast economic growth; (2) the rise of “new Asianism,” or the Asian model of economic development with Asian values; and (3) the development of regional blocs after the collapse of the bipolar superpower world.  Furthermore, the periphery policy, including policy toward Mongolia, was strongly influenced by Sino-U.S. and Sino-Japanese relations.
Chinese security expert Yan Xuetong asserts that China has found more common security interests with peripheral countries since adopting the good neighboring policy (e.g. preventing a world war and a new cold war, and avoiding regional military conflict). Chinese agree that this policy has been successful and has resulted in a more stable, peaceful environment, mutual trust, and enhanced national security.  Dating from the 1980s, Chinese reformers understood that their own economic opening was predicated on abandoning ideology to develop friendly relations and stop defining China’s relations with its neighbors in terms of Chinese relations with the Soviet Union or the U.S.
China marked the importance of the Mongolian relationship, even when Mongolia still was perceived as a Soviet satellite, when it signed a border agreement resolving outstanding disputes in November 1988. Within a month of the collapse of the Soviet Union, top PRC leaders went to the Mongolian capital of Ulaanbaatar. The cornerstone of the new bilateral relationship was the 1994 Treaty of Friendship and Cooperation, calling for mutual respect for independence and territorial integrity. This agreement both codified China’s century-long goal of removing the threat of Russia via Mongolia, and also was a concrete indication that China was concerned about the growing dominance of western, especially American and Japanese, interest in Mongolian domestic political and economic affairs. Growing U.S. ties with Mongolia, especially in the military and political fields, have only reinforced the Chinese perception that correctly managing the U.S. relationship is crucial for China in order to establish a positive security environment on its periphery.
The fact that the PRC originally saw Mongolia as distinct from Central Asia was exemplified by the establishment of the SCO and Jiang Zemin’s April 1996 “Treaty of Enhancing Military Mutual Trust in the Border Areas”–both without Mongolian inclusion. However, the expansion of the nature of trans-border threats to China to include political and military cooperation against terrorist and Muslim extremist movements, as well as to maintain regional security from separatism and to keep out the U.S. and Russia, has led China to see the utility of including Mongolia in the SCO as an observer. This may indicate that China as well as Mongolia is in the process of redefining the geographic concept of “Central Asia.”
Newly inaugurated Chinese President Hu Jintao illustrated the importance of stable Sino-Mongolian relations by choosing to stop in Mongolia during his first trip abroad in June 2003. There he stated that a stronger China was not a threat to its neighbors and proposed closer economic ties, which subsequently resulted in much larger Chinese investment in Mongolian mining and infrastructure. China achieved another major goal in its Mongolian policy with the agreement of Mongolia not to participate in any military alliance against China.
Although Chinese leaders do know of their neighbor’s suspicions that China is trying to politically re-establish the old tributary system and take over the Mongolian economy, they have been slow to fully understand the perception gap and to respond to such concerns.  Sensitive issues such as visits by the Dalai Lama, Chinese minority policy toward Mongol groups within the PRC, and the flight of Inner Mongols to Mongolia claiming political asylum are irritants to the overall relationship. The Chinese military is apprehensive, although apparently resigned, to the deepening U.S.-Mongolian military training program especially since September 11. China has made an attempt to provide humanitarian assistance to Mongolia to bolster its image (1991-1998 42.6 million RMB, as well as concessional loans worth over 100 million RMB), and increased its assistance program during Mongolia’s 1999-2002 winter livestock disasters. China has increased its fellowships for Mongol students to study in China, concluded a Medical Treatment Agreement to allow tens of thousands of Mongols to travel to Chinese hospitals for inexpensive medical treatment since 1999, and permitted sister city relationships to flourish.
It is clear that China sees its own policy as benign and focused on economic development, since it has no outstanding territorial disputes with Mongolia. The opening of nine new seasonal border trade portals in addition to the major one at Erlian/Zamyn Uud in the 1990s has resulted in enormous trade growth in China’s favor, even while the rampant smuggling of Mongol minerals and raw animal hair deprives both governments of needed tax revenues. Trade with the PRC (and Taiwan) is welcome and generally respected in Mongolia. The whole dynamic and tone of Sino-Mongolian relations have changed in the last fifteen years. In 2005 the PRC leadership likely is pleased that its regional policy as applied to Mongolian relations has been both economically and strategically advantageous and is likely to remain so, which is important to China’s overall plans for strengthening its role as an Asian and global power.
Dr. Alicia Campi has a Ph.D. in Mongolian Studies, was involved in the preliminary negotiations to establish bilateral relations in the 1980s, and served as a diplomat in Ulaanbaatar. She has a Mongolian consultancy company (U.S.-Mongolia Advisory Group), and writes and speaks extensively on Mongolian issues.
1. Remarkably, at the 2003 “Geopolitical Relations between Contemporary Mongolia and Neighboring Asian Countries—Democracy, Economics and Security” conference in Taipei sponsored by the Commission, the President of Taiwan’s National Security Council publicly claimed that Taiwan saw Mongolia’s foreign policy in the Asian region as a model for its own.
2. You Ji and Jia Qingguo, “China’s Re-emergence and Its Foreign Policy Strategy,” in China Review, Joseph Y.S. Cheng, ed. (Chinese University Press: Hong Kong, 1998).
3. Zhao Suisheng, “The Making of China’s Periphery Policy,” in Chinese Foreign Policy, Suisheng Zhao ed. (M.E. Sharpe: Armonk, 2004), pp. 256-275.
4. Zhao, 2004, pg. 257; You and Jia, 1998, pg. 128.
5. Tian Peizeng., Gaige Kaifang yilai de Zhongguo Waijiao (Chinese Diplomacy Since the Reform and Opening Up) (Shijie Zhishi Chuban She: Beijing, 1993).
6. Zhao, 2004, pg. 269