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What Does Xi Jinping’s Third Term Mean for China-Mongolia Relations?

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What Does Xi Jinping’s Third Term Mean for China-Mongolia Relations?

Since Xi assumed office, Mongolia has seen three different president, but the overall trajectory of the relationship has remained stable.

What Does Xi Jinping’s Third Term Mean for China-Mongolia Relations?

Mongolian President Khurelsukh Ukhnaa (second from left) and Chinese President Xi Jinping (second from right) pose for a photo with their wives during Khurelsukh’s visit to Beijing, China, Nov. 28, 2022.

Credit: Facebook/ Office of the President of Mongolia

When Xi Jinping was officially awarded a third term as president of the People’s Republic of China, after previously having altered the constitution to remove the two-term limit, it set him up to rule for 15 consecutive years – at least. Considering the growing insecurities surrounding Northeast Asia, what does Xi’s third term mean for China-Mongolia bilateral relations?

Since Xi first ascended to the presidency in 2013, international relations and global governance have faced a profound change. As competition between the United States and China has sharpened, the significance of maritime security and freedom of navigation has become even more apparent. For landlocked countries like Mongolia, each shift can have an impact on the economy, security, and foreign policy. For Ulaanbaatar, particularly because of its close proximity to Beijing, China’s policy toward Mongolia and Mongolia’s policy toward China is something to be considered for the long haul.

There are three main areas of China-Mongolia bilateral relations: governance, economics, and diplomacy. Particularly in the Xi era, these areas all combine together to define the trajectory of China-Mongolia relations.

On the issue of governance, authoritarianism has been growing in Northeast Asia and the Asia-Pacific region at large. Freedom House’s 2022 Freedom in the World report indicated a rise in authoritarian rule, and both of Mongolia’s neighbors, Russia and China, are leading the authoritarian leadership narrative. One key finding from Freedom House is that authoritarian governments are collaborating to consolidate power and accelerate their attacks on democracy and human rights. This is the elephant in the room for Mongolia: It is a democracy, not only sandwiched between two large powers but linked tightly with two growing authoritarian regimes that are not leaving office anytime soon.

While Xi has extended his presidential grip to the third term, during his rule Mongolia has had three presidential elections and as many different presidents. Between 2009 to 2017, Elbegdorj Tsakhia served two consecutive terms, making him so far the longest-serving president of modern Mongolia’s history. Battulga Khaltmaa served from 2017-2021. Current President Khurelsukh Ukhnaa will be the first president to serve one six-year term, thanks to new constitutional amendments.

From a global governance perspective, Mongolia’s three successful presidential elections highlight the country’s democratic process. Freedom House’s rankings illustrate a sharp distinction between Beijing’s authoritarian governance and Ulaanbaatar’s democratic process. In 2022, Mongolia scored 84 out of 100, 36/40 on political rights and 48/60 on civil liberties. In contrast, China scored 9/100, -2/40 on political rights, and 11/60 on civil liberties.

Although these scores highlight the distinction between China and Mongolia in areas of political and social rights, the fact that Mongolia is landlocked between increasingly authoritarian governments obliges Ulaanbaatar to make additional efforts to defend and maintain its democracy, democratic governance, and its process.

Yet despite the differences in governance, Mongolian administrations have consistently sought economic opportunities in the economic powerhouse to the south. Former President Elbegdorj Tsakhia envisaged a tripartite economic corridor between Ulaanbaatar’s traditional partners, Moscow and Beijing, including 30 proposed investment projects.

Elbegdorj first proposed the trilateral economic corridor in 2014, during the Shanghai Cooperation Organization (SCO) conference in Dushanbe, Tajikistan. From Ulaanbaatar’s economic standpoint, establishing an economic corridor with Moscow and Beijing is only natural and has tremendous tax and logistical advantages considering the close proximity of the three countries.

Under Xi’s tenure, China-Mongolia bilateral relations, particularly, economic partnerships, have only expanded. Chinese investments will continue to flow into Mongolia whether it is within the framework of the Belt and Road Initiative – generally involving state-owned enterprises – or the private sector. The longevity of Xi’s presidency gives his administration an overall understanding of Mongolia’s foreign policy as a whole, and Xi believes that he can deliver economic cooperation.

Since Xi took office, his economic policy toward Ulaanbaatar ensured China remained Mongolia’s highest export destination and trade partner. According to the China Brief, in 2021, “Mongolia exported a total volume of goods worth US$7.63 billion into China, with mining products making up 93 percent of it.” Newly emerging investments will, however, target Mongolia’s renewable energy and banking sectors.

That said, as traditional partners, two nations whose history has been bound together for centuries, there comes a time when something else needs to be offered other than an economic gain. This was shown during the beginning of the COVID-19 lockdowns in both Ulaanbaatar and Beijing.

Battulga Khaltmaa’s presidency (2017-2021) saw China-Mongolia and Mongolia-Russia relations tested in many ways, but the significance of strong ties between Russia, China, and Mongolia, including trilateral activities, remained visible. Despite the challenges, the Battulga administration, did not derail from the general foreign policy direction. Instead, Battulga’s diplomacy strengthened China-Mongolia bilateral relations for the long haul.

While the rest of the world bashed Beijing for spreading the coronavirus, Battulga’s diplomacy demonstrated Mongolia’s “good neighbor” relations. The so-called sheep diplomacy, the donation of 30,000 sheep, was indeed more than a diplomatic gesture but carried deep symbolism..

The incumbent president of Mongolia, Khurelsukh Ukhnaa took office in 2021. For Xi Jinping, Khurelsukh will be the third Mongolian president he would meet.

Khurelsukh’s first state visit to Beijing in November 2022 placed a heavy emphasis on China-Mongolia economic ties, particularly in the context of the post-COVID economic recovery. During the Khurelsukh-Xi meeting, Xi pointed out that China’s development plan includes contributing to the development of its neighbors, and China is ready to accelerate projects in Mongolia.

On Mongolia’s part, the interest to attract investment, not just from Beijing, but also from global partners is a strong incentive.

Since he took office in 2012, Xi has built stable, progressive economic relations with Mongolia’s three different presidential administrations and even more prime ministers. Xi’s third term as president will likely sustain the previously established economic agreements. Although his third term may not launch a new direction with Ulaanbaatar, China-Mongolia economic ties will continue to be a top priority.

Mongolia currently envisions a two-step strategy in bolstering bilateral trade, investment, finance, mining, energy, infrastructure, e-commerce, and green energy sectors with Beijing. From a foreign policy perspective, Mongolia and China will maintain high-level dialogues on the economy, contemporary international affairs, and security issues concerning both Ulaanbaatar and Beijing.

Khurelsukh will be the Mongolian president who will have the longest relationship with Xi, now that the Chinese leader has secured a third term; they will both be in power for the entirety of Khurelsukh’s six-year term. As comprehensive strategic partners and as leaders of Mongolia and China, the two will likely increase cooperation in emerging sectors such as renewable energy, development projects, and infrastructure and construction.