Mongolia, China: A State Visit and Encouraging Signs for Investors

On Oct. 26, less than a month after Mongolia's parliament voted to scrap a foreign investment law designed to prevent Chinese state-owned enterprises from gaining footholds in strategic sectors, Mongolian Prime Minister Norovyn Altankhuyag completed a four-day state visit to China. Throughout his visit, Altankhuyag reassured Chinese investors and political leaders that Mongolia, a darling-turned-pariah for investors in emerging markets, welcomed the friendship and business of its southern neighbor.

Nonetheless, as China's leaders are well aware, Mongolia can be a fickle business partner. With interests in Mongolian resources that are both strategic and economic, Beijing knows that no shift in the tone of Chinese-Mongolian relations is likely to be a permanent one. Still, the recent scrapping of the investment law and Altankhuyag's visit could signal a change in Mongolia's attitude toward investment from China.