A shop owner displays a Mongolian flour product at an import supermarket in Erenhot, north China’s Inner Mongolia autonomous region. - Photo: Xinhua
ULAANBAATAR, Mongolia (SCMP): Driven by steady demand for cashmere, bags, shoes and even camel wool, trade between China and Mongolia is flourishing via a bustling border town against a strong backdrop of e-commerce orders.
Along with Mongolia’s strategy of diversifying its economy to boost growth after the coronavirus pandemic, the landlocked country is also enjoying a boost in tourism from its neighbour.
According to the information office of the regional committee in China’s northern Inner Mongolia autonomous region, trips in both directions along its Erenhot highway and via its railway ports had risen by 95 per cent year on year to 1.75 million this year until September 5.
The same entry ports saw 442,000 vehicles pass through during the same period, double the volume from the same period of 2023.
Erenhot is a county-level city located in the Gobi Desert along China’s vast border with Mongolia, and it has particularly thrived since April after a 24-hour border crossing for freight was opened on a trial basis amid efforts to ease truck congestion at its port, which is the largest land link on the China-Mongolia border.
"In terms of distance, Mongolia and China are very close. Regardless of the purpose, this is the greatest advantage,” said Sumiya Chuluunbaatar, a non-resident fellow at the Mongolian Academy of Sciences’ Institute of International Studies.
“China’s infrastructure is still relatively new and perfect, and the affordability of the service industry still attracts not only Mongolians, but also more foreigner."
Mongolia’s exports to China rose by 10.6 per cent in the first seven months of the year compared to a year earlier to US$8.138 billion, according to Chinese customs data.
Shipments from China to Mongolia also rose by 48.5 per cent to US$2.647 billion during the same period.
"As far as I know, the scale of the border economy is modest, focused on border trade and services to truck drivers, merchants and tourists,” said Xu Tianchen, a senior economist at the Economist Intelligence Unit market research firm.
And Mongolian member of parliament Batshugar Enkhbayar urged for the 24-hour border crossing to be made permanent, with the trial set to conclude at the end of September, although he said that talks had yet to take place.
“The Mongolian side is getting bigger, due to mining projects in the Gobi region, and we’re making sure the crossing is more efficient,” Enkhbayar said.
Enkhbayar added that about 108,000 tourists had arrived from China this year through mid-September, eyeing Erenhot as a way to enter Mongolia by train to explore its “nomadic culture” and “remoteness”, making up 21 per cent of all foreign arrivals.
Xu added that Chinese tourist arrivals in Mongolia had grown by about 75 per cent in the first half of the year, with Erenhot the biggest crossing point.
Last year, Mongolia’s gross domestic product rose by 7 per cent compared to a year earlier, with the contribution of consumption standing at 6.1 per cent, down from 6.5 per cent in 2022.
And despite having ventured into the Mongolian market less than a year ago, Hangzhou Intelmind E-commerce CEO Wei Peiran has witnessed “remarkable” month-on-month growth due to a “diverse range of products, effective pricing strategy, and robust logistics system”.
Wei said he had used Alibaba’s 1688 business-to-business platform to tap the Mongolian market.
Alibaba is the owner of the South China Morning Post.
“Our approach focuses on directly sourcing from Chinese suppliers, streamlining logistics digitally, and delivering goods at the lowest possible cost,” he said.
“Mongolia presents a robust market with a young population and advanced technological infrastructure, including reliable internet access and payment systems.”
Chuluunbaatar at the Mongolian Academy of Sciences added that digital transformation would help entice foreign businesses because “registering a new company in Mongolia no longer requires paper documents”.
Wei is also eyeing an even bigger market through Mongolia by partnering with Central Asian countries, including Uzbekistan, to broaden his footprint.
“With over 35 million residents and a yearly growth of around 1 million, Uzbekistan’s rapid economic development highlights significant potential for selling Chinese products,” he added.
The United Nations E-Government Survey issued in September showed that Mongolia had risen by 28 places to 46th out of 193 member states on the E-Government Index since 2022 and by 20 places to 50th on the E-Participation Index since 2020.
“The findings of the latest UN E-Government Survey show the significant progress Mongolia has made in the last two years in digitising our economy ... and making it easier for citizens to engage with the government,” said chief cabinet secretary Uchral Nyam-Osor in an official statement. - SOUTH CHINA MORNING POST
