“Intense” meeting in a cool city

“People joke saying that you take a few walks from Beijing to reach Jining. This is because our city is the nearest from Inner Mongolia to the capital” emphasized Wang Xinui, Mayor of the Ulanqab City in his opening speech of the 3rd China-Mongolia Expo. Home to 2.1 million people and bordering Mongolia to the south, the city famous for its leather products, potatoes and steel framework production hosted the 3rd China-Mongolia Expo between 5-10 September, 2019.

Chinese policy makers aim to turn Ulanqab city into a modern trade logistics center as it sits in an important traffic location and quick development of the area can be seen everywhere. Within a few years, a new city rose adjoining the city and it is now divided into the old and new city. The Expo was organized in the new city and all the buildings which hosted meetings, expos and cultural events were brand new.

The biennial event has been organized since 2015 when the presidents of the two countries agreed to host the “China-Mongolia Expo” during official visit of Xi Jinping, President of the People's Republic of China to Mongolia in 2014. This year, the large-scale international exposition coincided with the 70th anniversary of diplomatic relations between Mongolia and China. Such a monumental anniversary has clearly influenced the scale of the event. Within the framework of the “Belt and Road” initiative, the main theme of this year's expo was “Development of China-Mongolia-Russia economic corridor and advancement of regional cooperation in North East Asia”.

Based on the Chinese investors` interest showed at the Boao Forum for Asia in Ulaanbaatar, Mongolia mainly introduced animal based products, and agriculture and food industry projects at the Expo. Deputy Prime Minister of Mongolia, U.Enkhtuvshin noted “Mongolia determined agriculture as a main pillar of its economy and is working towards developing export oriented agriculture,” in his opening speech.

Mongolia and China share a border stretching 4670 km established a profound relationship in many fields and their trade and economic relations could compensate for each other. China takes up 65.2 percent of Mongolia’s total foreign trade turnover which reached 8.4 billion USD in 2018, showing an increase of 21 percent compared to 2017. In his opening remarks, the Deputy Prime Minister added that the trade turnover between the two countries could reach 10 billion USD by 2020. On his part, Chairman of the National Development and Reform Commission of Inner Mongolia, Gun Min Zhun said “Inner Mongolia will continue to develop all around cooperation with Mongolia and make considerable contribution to the China and Mongolia trade turnover”. Currently, China has already agreed to make investments worth a total of 19.52 billion USD to Mongolia.

Within the framework of the Expo, more than 20 events have been organized in four main parts including the trade fair, cultural exchange, meetings, forums and investment in Hoh Hot, Ulanqab and Tung Lio cities. More than 7000 delegates from Mongolian and China and ones from Russia, South Korea, Japan, Israel and Special Administrative Regions of Hong Kong and Macau attended the Expo. Mongolia was represented by 1200 delegates including officials, business people, artists and the media.

About 300 and 400 business entities participated in 2015 and 2017 editions of the Expo respectively and their total sales figure reached 1.13 billion CNY and cooperation agreements worth a total of 2.28 billion CNY were signed. “We expect these figures to reach a new record this time, because the Expo is organized in both Hohhot and Ulanqab City” said T.Duuren, CEO of the Mongolian National Chamber of Commerce and Industry.

More than 500 Mongolian business entities participated in the expo organized in Hohhot and Ulanqab city. In Ulanqab, for example, Mongolia’s 50 largest companies that work in mining, tourism and the agriculture industry showcased their products and services. It shall also be noted that projects introduced at the Expo were closely associated to the Three-Pillars Development Policy of Mongolia.

At the “Regional development, Economic and Investment Forum” organized within the framework of the 3rd China-Mongolia Forum, the Mongolian side introduced its main projects. Specifically, 15 major projects of the Government of Mongolia and 56 projects of the private sector were presented at the forum.

Some delegates from Mongolian companies said the B2B meeting which aimed to propose those projects to the potential investors of China and Inner Mongolia to establish business cooperation with those interested parties was hugely successful. One of them was T.Garidkhuu, General Director of “Ti Bi Empire” LLC who was delighted to fulfill his mission by agreeing with officials from the related agencies of the Ulanqab City to open a brand store in the city where he plans to sell some of the company's products. The city officials also acknowledged to make discount on rent for his company for three years.

Since 1990, more than 14 thousand foreign invested business entities have been registered in Mongolia and 50 percent of them were Chinese invested. In this period, the direct investment of China reached 5.1 billion USD accounting for 20.1 percent of total foreign investment. Its investment volume already leads 112 countries which made investment to Mongolia.

Investors and project implementers have signed cooperation agreements and memorandums at the forum. The representatives from Zamyn-Uud Free Zone, for example, signed memorandum of cooperation with Logistics and trade center of Jining city and National Development and Reform Commission of Inner Mongolia. Regarding this topic, Wang Bingnan, Vice Minister of Commerce of China said, “We will continue to advance bilateral investment cooperation and give high priority to the development of Zamyn Uud Free Zone”. On top of this, UBZ Group of Mongolia and “Foreign trade development company” of Inner Mongolia signed memorandum of cooperation to kick-off a development phase of Zamyn Uud-Erlian economic cooperation zone. “The project shall have an enormous influence on the regional development and contribute to the infrastructure and border point progress of Mongolia” said Ya.Sanjmyatav, MP of Mongolia.

Additionally, Gun Min Zhun, Chairman of the National Development and Reform Commission of Inner Mongolia remarked “Political trust between the two countries has been continually strengthening and recent years saw immense progress in the economic and trade investment cooperation between the two countries”. His words are proven by statistics. The trade turnover between Mongolia and Inner Mongolia reached 4.9 billion USD in 2018 showing a 27 percent increase compared to the previous year. Number of projects which attracted direct investment from Inner Mongolia reached 226 as of July, 2019.

Furthermore, representatives from both sides agreed that bilateral economic, trade and investment cooperation shall continue to increase and emphasized that an industry which could have enormous capabilities shall be determined. With regard to this topic, we asked B.Bayarsaikhan, Director General of the National Development Agency of Mongolia what we need to do in order to intensify investment cooperation between the two countries. He said “Mongolia has to improve its trade structure, develop value-added manufacturing, advance customs clearance process and expand the mining and agriculture product trade”. In his opinion, the “Belt and Road” initiative shall play a huge role in this direction.

Ulanqab city only 40 minutes drive to Hohhot by freeway and is planning to be connected to Beijing by a freeway in the coming years to increase its traffic volume. Celebrated as “Summer camp of China's grassland” due to its favorable weather condition, the city has already received 16 million tourists this year. Ulanqab also boasts rich mineral deposits and mainly produces energy, iron, coal, meat, leather and chemical products. A total of 9000 tons cashmere products, for example, are exported to Europe and leather products made in Ulanqab are sold in 20 million shops around China. At the Expo, many Chinese companies expressed their wish to increase output and value of Mongolian cashmere products by improving cashmere fibre quality through advanced technology. Furthermore, Ulanqab is China's center of big data industry and data centers of large companies such as Huawei and Apple are located here.

The city is already on the fast track to development which can be evidenced by their GDP per capita of 2900 USD. It is almost 8.6 percent increase compared to the previous year. This figure shows that the purchasing power of the city residents are increasing fast.

On the other hand, the city is aiming to become a trade hub. That is why the Yabaolu market of Beijing was relocated here in Ulanqab city. Within the policy to promote trade, the city also tries to attract a flow of Mongolians coming to Erlian city.

Even though streets of the new city of Ulanqab city is somewhat quiet and lacks liveliness, it might be a completely different environment and an alive city with lights everywhere, streets full of residents in two years when it welcomes the Expo again. The reason for this optimistic thought is that Ulanqab was an old and poor city just a few years ago.