Shifting Russian-PRC Relations and its Implications for Mongolian Foreign Policy

By: Charles Emmett |

Mongolia has long been a place of interest for foreigners.  From the early 13th century until the fall of the Yuan Dynasty, the Mongols ruled over the largest land empire the world has ever known.  Almost three hundred years later during the Qing Dynasty, Mongolia fell under Manchu rule and remained so until a People’s Revolution gained nominal independence with the assistance of the Soviet Red Army in 1921. After the 1945 Yalta Conference, the Sino-Soviet Treaty guaranteed Outer Mongolia’s formal independence, marking a permanent division of Greater Mongolia. 

For the next 70 years, Mongolia was a satellite state, politically under the control of the Soviet Union until the fall of the USSR. As Mongolia quickly turned to democracy and capitalism, it adopted a “third neighbor” foreign policy to expand its relationship with countries beyond its borders.  As a result, the U.S. played a larger role in supporting a budding democracy in Mongolia.  The U.S. provided assistance through USAID, the Peace Corps, and direct contact between members of Congress and their Mongolian colleagues. U.S. NGOs worked with Mongolian counterparts to address issues ranging from the rule of law and corruption to women’s empowerment.  Militarily, the U.S. has worked with the Mongolian Armed Forces (MAF) to help them train for United Nations peacekeeping missions through the annual Khaan Quest exercises.  As a result, Mongolia now contributes the second largest number of troops from Northeast and Central Asia to peacekeeping missions around the globe.  The military cooperation also allowed Mongolia to provide assistance to the U.S. missions in Afghanistan and Iraq, and led to Mongolia’s membership in the Partnership for Peace under NATO. Though the U.S. and Mongolia enjoy a deepening relationship, Mongolia’s geographic location is limiting. Surrounded by Russia to its north and the People’s Republic of China (PRC) to its south, Mongolia occupies a complicated geopolitical position.  Russia fears the U.S. influence in Mongolia, while the People’s Republic of China believes the U.S. is trying to encircle it.  Historical mistrust between Russia and the PRC induces both countries to compete for influence in Ulaanbaatar.  So far, Mongolia has been able to successfully play one power against the other to prevent one side from gaining too much influence. But with the evolving relationship between Russia and the PRC, Mongolia has had to change its strategy.  

With shifting relations in Northeast Asia, The Project 2049 Institute and Dr. Alicia Campi discussed Mongolia’s strategy and its future relations with the United States. Dr. Campi is a former diplomat involved in the preliminary negotiations to establish U.S.-Mongolia relations, now a visiting scholar at The Edwin O. Reischauer Center for East Asian Studies and author of  “The Impact of China and Russia on United States-Mongolia Political Relations in the Twentieth Century.” 

What is Mongolia’s current relationship with the People’s Republic of China? 

In 2016, the new government (Mongolian People’s Party[1]) will likely continue with the same foreign policy.  Since 2014, Mongolia has been looking at a new strategy of a trilateral Russia-Mongolia-China policy.  There have been three trilateral meetings between the countries held on the side of the Shanghai Cooperation Organization summit; the most recent leading to an agreement on the new economic corridor which will run through Mongolia.  This new strategy stemmed from the fact that the Mongolian government increasingly believes bilateral relations do not work.  Additionally, the government has concluded it is no longer efficient to play one country (Russia) off the other (China), given that the Russia-China relationship has become more comprehensive.  But, Mongolia is aware this new relationship between the two powers will likely be short.  Russia is looking east because of the sanctions resulting from Ukraine, while China is looking west with its One Belt One Road (OBOR) initiative.  China wants Russian oil and gas, and it knows Russia is desperate for customers, so China is squeezing Russia on the issue.  Mongolia’s new trilateral strategy, though, has caused its friends in the West to start asking questions, and prompted Mongolia to initiate another trilateral relationship in 2015 with the U.S. and Japan to balance its relationship with Russia and China.             

President-elect Donald Trump has said he will improve relations with Russia. How will this affect Russia’s current relations with the PRC, and what could it mean for Mongolia? 

For Russia, a better relationship with the West will bring back customers, meaning Russia will no longer need to rely on China.  Under the agreement for the new economic corridor, for every Chinese gauge line that is built going south, there must also be a Russian gauge line built going north.  Right now, the Chinese are funding the entire project due to Russia’s tenuous economic situation.  However, China cannot afford to do this.  In the past Russia and China circumvented Mongolia, but given the terrain and increased distance it is much more expensive. Hence the agreement was made to go through Mongolia, making it shorter and cheaper. China also has to focus on the Manchurian provinces, which are not covered under OBOR. In that region, China has prevented Japan from contributing to the development of the area which has placed the financial burden on China. If the U.S. and Russia start to build a better relationship, this will make room for Japan to come in and help fund the Russian rail lines. 

If relations between the U.S. and Russia do not improve, what will happen to the rail agreement?  If Russia does not have the money to fund rail lines going north, and it results in only Chinese gauged rail lines, won’t the PRC’s influence over Mongolia increase? 

Mongolia will never allow just a Chinese rail line.  

So, then Mongolia will just end the agreement? 

Yes, they will; Mongolia has done it in the past and will do it again.  Ulaanbaatar is good at finding other ways to influence China.  For example, ten years ago, Mongolia and North Korea made an agreement to allow North Koreans to work in textile factories, construction, and to build rail lines, all providing important hard currency for North Korea.  Mongolia could decide to end this agreement.  Doing so would put pressure on China due to its concern about the potential collapse of North Korea, which would cause refugees to flood across its borders. 

Given its location, is it possible for the U.S. to boost its relations with Mongolia as it increases its focus on Asia?  

The U.S. has a very weak economic relationship with Mongolia.  Historically, the United States has protected its interests, but there are few economic interests for the U.S. in Mongolia.  Although there are a lot of natural resources located in Mongolia, they do not really benefit the United States.  Instead, the U.S. and Mongolia have built a dynamic military relationship.  Through the U.S.-Mongolia-Japan trilateral arrangement, the U.S. is benefiting militarily while Japan benefits economically.  

The Mongolian government has stated it would like to increase its role in the region, specifically in dealing with North Korea.  What role could Mongolia play in helping the international community resolve the North Korean nuclear issue? 

Mongolia has a historical relationship with North Korea.  During the Korean War, Mongolia took in child orphans from the North.  Mongolia was also the second country in the world to recognize North Korea.  While this does not seem like much, it is very important to the North Koreans.  In addition, Mongolia is not a Confucian society; it is a nomadic society, so it has an alternative way of thinking.  This difference has allowed Mongolia to establish the relationship with North Korea that is maintained today.  During the Six Party Talks, North Korea felt like its “friends” were not backing it anymore; Russia was no longer buying its loyalty, and China saw this and decided it could be less generous with its money.  People think China has more influence over North Korea then it really does.  North Korea first fell under Chinese rule during the Han Dynasty, so China knows it would be better to retake North Korea then to let it collapse, and the North Koreans know this as well.  Furthermore, in China today, Koreans are one of the 56 officially recognized minority groups.  How do you think this affects North Korean thinking?  Given all these factors, North Korea felt like it was on its own.  There was no one there to listen to them or vote on their behalf.  Mongolia realized this, and after the death of the Six Party Talks, Mongolia started the Ulaanbaatar Dialogue.  The dialogue has been successful thus far with the North Koreans attending both the first and third meetings.

Charles Emmett was an Intern at the Project 2049 Institute. He completed his M.A. at the Josef Korbel School of International Studies at the University of Denver, where he focused on China and U.S. National Security.    

[1] In June, 2016, the Mongolian People’s Party (MPP), which has governed for most years since the revolution, won an 85 percent majority with 65 seats in the 76-member parliament, taking back power from the Democratic Party. <http://www.reuters.com/article/us-mongolia-election-idUSKCN0ZF0PE> 

This article draws from an interview with Dr. Alicia Campi regarding the future of Mongolian foreign policy.