China-Mongolia trade soars amid growing efforts to boost bilateral cooperation

By Tao Mingyang

The level of cross-border trade between China and Mongolia especially in the energy sector saw stable increase in the first half of 2023, official and industry data showed, thanks to a steady recovery in trade activities after the COVID-19 pandemic as well as closer economic and diplomatic ties between the two countries.

Amid the closer ties, Mongolia is reportedly seeking to further expand trade by suggesting 24-hour operations at ports. While logistics for such a move could be challenging, various efforts are underway, experts noted.

As of Tuesday, the Ceke Port, one of the largest land ports in Alxa League, North China's Inner Mongolia Autonomous Region, has imported 7.01 million tons of coal, reaching the highest so far this year, according to local government data.

Coal is the most-traded large commodity between the two countries, and the Ceke Port-connected Mongolian Shiveen Khuren Port exports nearly half of Mongolian coal each year. And trade activities at the port are rising steadily since the port resumed normal operation at the beginning of 2023, according to a local cross-border trader surnamed Zhang in Ceke Port.

"Mongolian coal exporters are seeking more business opportunities with China in the post-pandemic era, and government authorities may take measures including turning down the purchasing price of coal in coming days to secure exports," Zhang told the Global Times on Thursday.

The signs of thriving China-Mongolia trade are also seen in other land-linked ports. By the end of May, the cargo transport volume via Erenhot Port reached 1.6 million tons, increasing by 25.7 percent year-on-year.

In the Ganqumaodu Port, the largest highway port between China and Mongolia, a total of 16.33 million tons of import and export cargo was handled in the first half of 2023, jumping by 200.26 percent year-on-year, the Xinhua News Agency reported on Thursday. The growth rate topped all China-Mongolia ports.

Latest data from China's General Administration of Customs showed that the China-Mongolia trade volume in the first five months of 2023 reached $6.58 billion, up 73.4 percent year-on-year.

Industry insiders and experts said that growing diplomatic exchanges between the two countries are conducive to lifting bilateral trade.

During the China-Mongolia Trade and Economic Cooperation Forum held Beijing on June 29, Mongolian officials expressed welcome for Chinese enterprises to invest and do business in Mongolia.

The forum was held during a visit by Mongolian Prime Minister Luvsannamsrai Oyun-Erdene, and it was attended by more than 100 Mongolian representatives and 300 Chinese representatives from mining, construction, trade, tourism, transportation, animal husbandry and other sectors.

During Oyun-Erdene's visit, the prime minister met representatives from multiple Chinese companies, including the CHN Energy Investment Group, China National Petroleum Corp and China North Industries Corp, and discussed cooperation in railway transport and improve investment environment.

"As eternal neighbors linked by mountains and rivers, we need to support each other and further strengthen mutually beneficial cooperation," said the Oyun-Erdene.

Experts said the economic recovery of Mongolia is at a crucial point after the pandemic, and bilateral cooperation will be deepened after the top-level diplomatic meetings.

Mongolia is reportedly seeking 24-hour operation in four major bordering ports to expand trade and economy cooperation with China, according to scmp.com. Chinese experts said current conditions among most Chinese ports to Mongolia might be tough to support the high-duty operation.

"Due to lack of customs officers, limited quarantine checking equipment and infrastructures, commencing 24-hour operation in most of China-Mongolia ports might be challenging," Qian Feng, director of the research department at the National Strategy Institute at Tsinghua University, told the Global Times on Thursday, while noting that bilateral cooperation will keep pacing forward despite certain challenges.

China and Mongolia have great cooperation potential in transport, business trade, tourism and environment protection, which will expand and deepen bilateral cooperation, said Qian.

The government of Alxa League announced on May 29 that the railway connecting the Ceke Port to the Shiveen Khuren Port has been launched, which is a vital component of the China-Russia-Mongolia economic corridor and will be put into use by the end of October of 2023.

The railway is estimated to lift the annual cargo handling capacity of the Shiveen Khuren Port to 20 million tons.

The railway will reduce the cost of long-range transport of coal from Mongolian mines to its ports connecting China, and help increase the efficiency operation of the Chinese ports, said Zhang.