2016年CRI Chinese firms in Mongolia take measures to seek common development while investing

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Secretary-General of the Chinese Business Association in Mongolia, Shagnalt, says Mongolia itself operates under a simple economic system.

"The economic structure in Mongolia is quite singular. There is hardly any manufacturing in the country, and almost all of its foreign currency comes from exporting mineral products. Foreign currency is then used for purchasing daily necessities or manufactured goods. From this perspective, Mongolia's economic structure is complementary to the huge Chinese market."

There are around 71-hundred Chinese companies registered in Mongolia.

However, only around 2-thousand of them are still operational.

The reasons why so many companies remain mothballed are varied¹.

Observers suggest one of the underlying² issues is a wide-scale reluctance³ among people in Mongolia to allow foreign companies to operate on their territory.

Dalan Guerban, a representative of a Chinese Mining firm operating in Mongolia, says one of the best ways to overcome this is for foreign companies to make themselves into 'local' companies.

"The top priority is to observe the laws and local rules in Mongolia. The operational activities of a company need to be localized, since they're registered in Mongolia, so they need to act in accordance with the local laws and other regulations. They should also hire as many local staff as they can."

Guerban says it's important to maintain a solid working relationship with the local staff, given that the country is home to less than 3-million people.

He says his company, during down times, will cut operational expenses, rather than laying off local staff.

Shagnalt with the China Business Association in Mongolia is suggesting looking beyond natural resources, saying there are growing opportunities in other areas in Mongolia, particularly in infrastructure⁴ development.

He says Chinese Premier⁵ Li Keqiang's upcoming trip to Mongolia is likely going to focus on that.

"One of the keys in Mongolia's diplomatic policies is to attract foreign assistance, investment and aid for its infrastructure construction, as well as trade and economic cooperation. We hope to implement⁶ those bilateral⁷ projects which have not been put into effect yet as soon as possible, so as to bring more benefit to Mongolia's economic development."

Mongolia is playing host to a meeting of European and Asian leaders starting on Friday.

For CRI, I'm Xie Cheng.