17.08.2017 Author: Seth Ferris

What China Wants Tomorrow, Mongolia Does Today

Mongolia's honor guard has always had a lot of national "flair"

Mongolia’s honor guard regiment has always had a lot of national “flair”

Russia and China are emerging powers with the potential to rule the world, at the expense of the current balance of power. Sometimes they are in partnership, sometimes in conflict. Consequently every move these countries make is reported, analysed and responded to.

But if you look at a map, you may well wonder: why don’t we hear more about Mongolia? Both Russia and China have long seen this landlocked country as a buffer against the other, and that other emerging giant, Kazakhstan, is within walking distance. All three of these countries have agendas towards it, and as a landlocked country Mongolia is obliged to show the utmost respect to neighbours bigger and more powerful than itself. So are we to believe that nothing significant ever happens in Mongolia?

In fact Mongolia continues to serve the purpose it has since it regained its independence nearly a century ago. The Eastern version of the Spanish Civil War is being played out there. Not with guns, but with great powers playing proxy politics. Projecting their ideas onto this helpless neighbour, they try out things they can’t openly try at home and see how they work out – and if successful, use them against the other, and anyone else they want to gain an advantage over.

During Cold War times the Soviet Union was Mongolia’s puppeteer. But now it is most definitely China, which takes full advantage of the opportunity to research on its grasping elite and poverty-stricken masses. What works in Mongolia today is what China will try elsewhere tomorrow: and is there any country on earth where China is not a major investor, a serious political partner or an invasion waiting to happen?

When red tape isn’t red enough

Take the latest headline: “Mongolian and Tibetan Affairs Commission to be Disbanded“. Government agencies come and go, and the functions of this commission are being absorbed by other bodies. But the significance of this move is not lost on Mongolians or Chinese, or anyone dealing with China now.

As everyone knows, China refuses to restore Tibetan self-rule and routinely objects when the Dalai Lama, considered Tibet’s political as well as spiritual leader, makes trips to other countries from his exile in India. True to form, it has objected to every visit the Dalai has made to his co-religionists in Mongolia, on one occasion retaliating by blockading the railway .

Mongolia’s new president, Khaltmaagiin Battulga, has only been in office a month. But he was in government during the Dalai’s last visit, in 2011, during which he relocated some of the Dalai’s audiences to avoid upsetting the Chinese, even though the visit was of a religious, and not political, nature.

Battulga is a businessman, and China is by far Mongolia’s major trading partner. It is not hard to see why Mongolia would want to erase a separate Tibetan Affairs Commission from its list of government agencies. It is also not hard to see why this action would be presented the way it is, rather than an overt acknowledgement that China is calling the tune.

Hostages to misfortune

China exploits Mongolia’s position to the full. One of the reasons it is such an important trading partner is that Mongolia needs ports, and China provides them. This is also why for many years only one port, Tianjin, was made available, and China paid 30% less than market value for any commodity it imported from Mongolia, or exported onwards, as a form of assistance fee.

In return for good behaviour, China is now opening up more ports. But it is also increasing is stranglehold over the Mongolian economy, which is largely dependent on mineral exports and the general health of China.

Mongols have proved themselves true descendants of their independent-spirited ancestors who once had the largest contiguous land empire the world has ever seen. Though they seek increasing foreign investment from Western countries they also have deep-rooted objections to the exploitation of their resources by so many foreign companies for the benefit of a small and notably corrupt elite, and these views must be taken into account in the healthy democracy introduced after 1990.

The electors rejoiced when increasing restrictions were imposed on foreign companies by the previous government, as these were designed to ensure more wealth flowed to the people. However they simply dissuaded the electors from entering Mongolia in the first place. Who benefitted? China. Mongols are worse off without the investors; China has gained greater leverage and enough resources of its own not to need favourable agreements with Mongolia.

Similarly, the democratic revolution after the fall of the Soviet Union resulted not only in multi-party democracy but advanced electoral laws, such as counting blank ballots in the total cast and insisting that candidates have to gain a majority of all votes cast, including the blank ballots. It also introduced a mixed electoral system in which some parliamentary seats were decided by first past the post voting and others allocated proportionally. This gave new parties the opportunity to make an impact, an important prerequisite in a country which has abandoned one system and is trying to introduce another.

Mongolia is one of those former Communist countries where the old ruling party, the Mongolian People’s Revolutionary Party (MPRP), just rebranded itself as social democrat and continued as before. It has enjoyed spells of democratically-sanctioned rule, whilst continuing to display a lot of Soviet era tendencies .

But in 2010 the MPRP decided to complete its rebranding by removing the word “Revolutionary” from its name. Former leader Nambaryn Enkhbayar objcted to this, so broke away and founded a new MPRP to continue the traditions of the old. This new party gained proportional seats and entered government alongside the old MPRP’s centre-right rivals, the Democratic Party.

The Chinese communists were happy to indulge the MPRP’s new line, as it was merely a further extension of its own evolution. It was another Chinese experiment in Mongolia. But when it resulted in a split this was not acceptable. Unsurprisingly, Enkhbayar was prevented from standing in the next election on corruption charges, which are applied very selectively in a country famous for political graft. Similarly the electoral system was changed to a purely first past the post one, which favours established parties over new ones. The new MPRP now has only one seat in parliament, and no hope of displacing the old MPRP as the voice of the left.

All these things might have happened anyway. But it seems that every change made in Mongolia benefits China more than anyone, including Mongolia itself. Modern Mongolia may have won its independence from China in the first place, but China is now getting is payback big time.


Mongolia is always keen to stress that it has a “Third Neighbour” policy, which means that it regards itself as closer to the Western world than to Russia or China, and seeks Western assistance where possible. This is also something China is happy to indulge as an experiment, as it is gaining an ever greater footprint of its own in the West in key areas such as infrastructure.

Mongolians are increasingly educated in the West, whereas previously they found themselves in the Eastern bloc. These students and prospective entrepreneurs thus form a sort of advanced guard for China, which wants to know how far it can push the export of its own ways, and the importation of foreign ways, whilst continuing to turn things to its own advantage.

Mongolians are under no illusions about this. The older ones remember the Soviets playing the same game with them. Though a Soviet satellite state Mongolia was allowed to retain nominal independence so the Soviets could see how far their own ideas went.

Mongolia was often run by non-communists, despite its total dependence on the Soviet Union in retaining its “independence”. This promoted the idea that Soviet-style communism was a historical inevitability which political leaders of all views would eventually end up practising, and was thus a perpetual threat to the West.

These non-communists also advocated the reintegration of the Chinese province of Inner Mongolia with the independent state, whilst nationalist China advocated the opposite. When the nationalist Chinese delegation vetoed Mongolia’s application for UN membership in 1955 on the grounds that Mongolia was part of China but was then forced to back down, as the international community was happy to accept the Moscow-declared status quo.

The proxy Nazi-Soviet fight known as the Spanish Civil War ended in victory for the Nazis in 1936. Emboldened by this, Hitler created World War Two only three years later. Hungarians might ponder the connection between Moscow getting its own way via Mongolia in 1955 and it moving in to crush the Hungarian Revolution, despite international condemnation, the following year.

Mongolia emerged from that period with a new democratic system achieved by Mongolians rather than imposed by new invaders. Mongols now hope this will happen again, and the country’s Western orientation is designed to increase this independence, which is celebrated even by those who utterly reject the communist orientation of those who achieved it. But Western investment is worthless if you can’t get the goods out. Landlocked countries can’t preserve their independence without having good relations with the neighbours who give it access to the sea, and thus international trade.

Foreign investment in Mongolia, when it comes, takes two forms. The main one is foreign companies, and sometimes governments, investing in exploiting its mineral or agricultural resources. But they can only do this if they get their goods to market, and the more you invest, the more you need the infrastructure to do that. Who invests in infrastructure? China, as another of its Mongolian experiments.

The other countries need to know they will get the goods out before committing to infrastructure development. China doesn’t need Mongolian goods, but does need to control the supply of those goods. Almost all of Mongolia’s public facilities are either Soviet-era holdovers or newer Chinese developments. In practice, this means other countries will only be able to trade in ways Beijing wants. This has long been a Chinese policy, and Mongolia is being used to see how far other countries are prepared to submit to it.

China has now turned the economic screw even more by founding of the Asian Infrastructure Investment Bank, dedicated to this purpose. Eventually, other countries will object to the price they have to pay to invest in countries where they can’t move without China. But the more Mongolians themselves object, and secure trade agreements with other countries, the more this, once again, benefits China.

Words don’t speak louder than words

Mongolia sees the problem of being more of a plaything the more it can offer. It is building a new international airport for Ulaanbataar, which will be able to handle a lot more traffic, of higher carrying capacity, than the present very restricted one. It is also trying to involve Russia in its trade arrangements moreThese measures may indeed integrate Mongolia’s trade relations so that China can’t move without greater co-operation with others on Mongolia’s terms. But for now Mongolia can only make do with cosmetic gestures to placate an increasingly restless, left behind population who no one else wishes to help.

Businessman-president Battulga has promised to support Mongolia’s traditional way of life, the herding, grazing and breeding practiced by the nomads who inhabit its wide open spaces. As these nomads largely support his political opponents in the old and new MRPR, and he only won the election by a tiny margin, he is likely to make good on this promise. But what will that actually mean, if these nomads cannot be integrated with the trade priorities set by the wealthy political elite in the capital?

Battulga is promising in effect to “take back control”. He is part of the oligarchy who got rich after communism fell, but says he wants to redistribute wealth more widely. China is struggling with how to maintain the one party state now a nouveau riche has emerged, as many other countries have before. Maybe restoring the importance of traditional practices will unite the poor with the elite against the new fancypants who think their opinions are more important now. If this fails, it will affect Mongolia but not China, If it succeeds, China has much more to gain from it.

All great powers like to see just what they could get away with if they tried. The US has forfeited a lot of international goodwill by doing the same in its allied countries. But first it was the Soviet Union and now China–they have been using Mongolia as their policy testing ground for a hundred years. What Mongolia does today is what China wants to do elsewhere tomorrow, but can’t yet get away with or be sure it will work. It is Western fear of eventual Chinese conquest, not lack of newsworthiness, which is keeping Mongolia off the front pages.

Seth Ferris, investigative journalist and political scientist, expert on Middle Eastern affairs, exclusively for the online magazine “New Eastern Outlook”.

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