ASSESSMENTS

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

Oct 29, 2013 | 10:02 GMT

Mongolia, China: A State Visit and Encouraging Signs for Investors
Mongolian Prime Minister Norovyn Altankhuyag (L) greets Chinese President Xi Jinping in Beijing on Oct. 25.

(KOTA ENDO/AFP/Getty Images)

Summary

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.

The Mongolian prime minister's trip to China may mark a shift in Mongolia's attitude toward Chinese investment....

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