China: the 800lb Gorilla

I just read a great article by Alicia Campi, president of the consulting and marketing company U.S.-Mongolia Advisory Group (USMAG), over at Transitions Online. In "Mongolia: The Road Ahead" Campi takes a hard look at Mongolia's treacherous path forward. The article's focus is the key question of Sino-Mongolian relations with with regard both to Mongolia's economy and to its national sovereignty. The analysis of the "realist" and "liberal" views of the relationship is very helpful in defining the various views of how Mongolia should handle itself vis-a-vis China:

The former would warn Mongolia against greater Chinese involvement in its economy and society, while the latter tend to see greater integration of the two economies as a way to avoid potential military conflicts.

The realist view is exemplified by John Mearsheimer of the University of Chicago in his prize-winning book The Tragedy of Great Power Politics and by the Taiwan specialist Denny Roy of the Asia-Pacific Center for Security Studies. In this view, the Chinese seek to use economic expansion to enlarge their sphere of influence and redress the wrongs of history. The late Gerald Segal of the London-based International Institute for Strategic Studies advocated China’s “containment.” Roy similarly calls for China’s “enmeshment” in a web of security relationships among its neighbors, in order to slow Chinese growth.

Such a position defines the strategic thinking of Mongol officials, including the present prime minister, Ts. Elbegdorj, who returned to office last year. Throughout history Mongolia and China have had a highly antagonistic relationship. Even 60 years of peaceful coexistence has not obliterated the memories and suspicions on both sides. Mongols remember that Mao himself raised claims to Mongolia with Khrushchev in 1954, even though four years before he had recognized Mongolian independence. As Mao's attitude showed, modern Chinese governments have always defined Chinese sovereign territory based on their succession from the Qing dynasty, and Chinese histories indicate that Mongolia was unjustly separated in 1911 at the collapse of the Qing.

The piece also confirms some of my more gloomy predictions about China's growing and aparently unstopable influence in Mongolia.

...Perhaps the most far-reaching change in Mongolia’s trade patterns during the transition era [the early 1990s] was not oriented towards free markets in Europe, the U.S, Central Asia, or Japan, but towards China. Prior to 1991, 80 percent of Mongolia’s trade was with the USSR and 15 percent with other socialist countries. Russia can no longer afford Mongolian products, however, and China has readily stepped in to fill the breach. Since 1999, more private investment in Mongolia has come from China than any other country (38 percent in 2004), and in 2005 over 60 percent of Mongolia’s exports will go to China. Many political and strategic analysts, especially in the U.S. and Mongolia, are concerned about China's growing penetration of the Mongolian economy and caution that this will have negative military and political implications. Over time Mongolia needs to work toward a balance in its relations with China and Russia, they argue, although no one is able to predict when Russia will be able to reassert itself as a major partner. These same analysts also minimize the need for any strong political or economic relationship with the Central Asian republics.

At the end of the article, the question of Chinese domination reappears:

It appears that foreign business and economic development advisers may in fact be advocating trade policies for Mongolia concerning China that could be counterproductive to their governments’ Asian regional interests, as well as harmful to their goals for Mongolian democracy building, market transparency, and national security. During the past 15 years, we have watched China expand into the Mongolian market with a sense of inevitability, and done little to actively support the Mongols in diversifying their trade to partners in Central Asia. Such continued passivity surely will lead to economic domination over Mongolia by the Chinese and other more precarious ramifications which will not enhance stability in the Northeast Asian region.

The article propounds an idea of looking neither West or East only, but of re-establishing the silk road, or some modern variation thereupon:

Could not Mongolia reopen the Silk Road (perhaps modernized as the "Meat and Minerals Road") and look to Central Asia, Tibet, even India, for a third neighbor, thus renewing traditional cultural and religious ties and finding immediate markets for its meat and animal byproducts? This scenario has been promoted by former Mongolian prime ministers Byambasuren and Enkhbayar, and the historian B. Baabar. I myself have been a proponent of Mongolia as a bridge between East and Central Asia. Positioning itself as a regional crossroads could lead Mongolia to higher-end markets in the Middle East and Europe for diversification of its foreign trade. In this way, the traditional economic monopoly of China or Russia over Mongolia could be somewhat balanced by capitalizing on Mongolia and Central Asia’s common nomadic and Silk Road heritage, relatively close geographical position, and similar Soviet-era business structures and experiences. I believe a pro-Central Asian policy would be more realistic than the false expectation of garnering great profits only from integration into Northeast Asia. In fact, in analyzing economic statistics for Mongolia in the 1990s, I found that although foreign companies invested $1.5 billion in Northeast Asia, $520 million was placed in only one Chinese province (Jilin), $530 million went to the Russian Far East, and Mongolia’s share was less than 1 percent – the smallest in the region except for North Korea! It appears that following a Northeast Asian integration policy so far has not benefited Mongolia economically, nor provided a necessary counterweight to China’s growing penetration and control.

Travelling in Mongolia does turn up a good bit of evidence that India is far from a dispassionate bystander to Mongolian affairs, and vice versa. If I recall correctly, the Indians have a quite impressive embassy in UB, and are doing a fair bit of investment or at least investment research in Mongolia. Although there are a number of pitfalls that this plan could lead to, the real problem may be one more of local Mongolian attitudes:

The great majority of Mongolian policymakers, however, remain unconvinced that promoting ties with Central Asian nations will help them. They privately denigrate these countries as too Turkic, Muslim, and "Soviet" in mentality. Many of these beliefs appear to stem from the negative biases against Central Asian peoples promoted by the Russians in socialist times. Today, Mongolian leaders are likely to prefer to look east ("forward") to the Pacific Confucian-influenced nations, rather than west ("backward") to the Central Asia of nomadism and socialism. For example, in his Mongolia’s Foreign Policy in the 1990s: New Identity and New Challenges, Batbayar sees that the choice between Northeast Asia and Central Asia has a developmental aspect: “This choice implicitly concerns the struggle between the nomadic identity of Mongols vs. its road to [the] modern twenty-first century. It also concerns the vital question of sources for necessary technology and know-how in order not only to overcome the transition period but to make the country self-sustainable and competitive in coming years and decades.”

Also of note: a discussion of whether Mongolia is useful for purposes of American military projection in the area.

An altogether worthwhile article.