What is new around China-Mongolia-Russia Economic Corridor

    Beijing, China — Huge clouds of dust have become a regular sight in the Gobi due to the passing of thousands of heavy-duty trucks loaded with coal bound for the China-Mongolia border.  “To earn money, I bought a second-hand truck and hired a driver. I hope to recover its cost within a year,” said Bayanmunkh.B, one of these heavy truck-owners.  “I have chosen the Hangi-Mandal border crossing because it is ten times less congested than the Gashuunsuhait-Gants Mod border crossing.”

 

Screen Shot 2017-11-25 at 4.26.55 PM
Photo by Reuters/Rentsendorj.B

 

“Around 5000 heavy-duty trucks carry coal to the Gashuunsuhait, and sometimes the drivers are stuck for a week at the border zone because of the queue,” said a local police officer Bayarbat.D over the phone. The border can only let 700 trucks through per day. Their target for the incoming year is 3000 trucks per day, according to a Reuters report.

Under the China-Mongolia-Russia Economic corridor, one of the six priority corridors of the Belt and Road Initiative, Mongolia, China, and Russia agreed to fast-track the cross-border shipping of freight. Besides increases in capacity at border checkpoints, there are over 30 other projects lined up within the scope of the program.

 

    The bigger picture is that the China-Mongolia-Russia Economic Corridor is still a conceptual exercise, rather than a physical reality.  After the signing of the agreement on the trilateral economic corridor, 17 months have passed. What progress has there been, if any, on the listed projects during this period?

    The Mongolian government has released an executive order to establish a joint center for investment and projection in Ulaanbaatar to implement the project in the first phase. “Building up the central railway and road corridor”, “ searching an opportunity for Chinese companies to get involved in modernizing the electric power grid in Mongolia and Russia” are considered priorities among the 32 projects, according to the Ministry of Foreign Affairs of Mongolia.

“The participation of private companies in the economic corridor is still unclear at the moment,” said Gansukh.R, counsellor of Commercial and Economic at the Mongolian Embassy in China. But several companies have already targeted the project and preparing for the future benefits.

    For instance, Techenomics International Co, which has a fluid analysis laboratory for the Oyu Tolgoi copper mine, has been operating in Mongolia for last six years. “We are very keen to become involved with the Belt and Road Initiative for commercial and cultural reasons, as it fundamentally provides new business opportunities for my company to grow and become more entwined to an economy,” replied Chris Adsett, the CEO of Techenomics International Co over email.

    Furthermore, China 22MCC Group signed an agreement on infrastructure programs with the municipal government of Erenhot, which is considered the official beginning of construction on the China-Mongolia economic cooperation zone, according to a China Daily report.

    Also, an association of financial cooperation including 33 financial institutions from China and Mongolia was established in September, in Hohhot, Inner Mongolia, according to the Belt and Road Initiative’s official website. The association is in charge of coordinating financing for China-Mongolia-Russia Economic corridor projects, by sharing investment risks and facilitating cross-border operations.

    Through the China-Mongolia-Russia economic corridor, Mongolia hopes to access third markets overseas. It is obvious enormous effort will be needed to implement the hall, but a thousand mile journey begins with the first step. These early steps have been mostly made by private companies instead of government officials and institutions. If the program is ultimately implemented successfully, Mongolian coal truck drivers will no longer have to be stuck for a week at a time at border crossings.

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