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Between the Bear and the Dragon: Mongolia's Relations With China and Russia
From: Columbia University
| By:
Morris Rossabi |
EDITOR'S INTRODUCTION |
In the thirteenth century, Chinggis Khan and his successors used powerful cavalry, innovative military tactics and the  mobility that the Mongols had cultivated as herders to carve out the world's largest contiguous land empire. Infighting among clans and tribes cost Khubilai Khan, Chinggis's grandson, the empire, and Mongolia has been caught in the political maneuvering of China and Russia ever since. The Chinese dominated Mongolia from 1691 until 1911, when the Qing dynasty fell. Then the Soviets took advantage of the chaos and helped Mongolia form the world's second Communist state. In 1991, Mongolia held free elections and rejected the Communists. Today, Chinese crossing the Mongolian border are not armed with guns but with yuan, the Chinese currency. "Within 10 years, China has become Mongolia's largest trading partner and largest investor," says Dr. Morris Rossabi of Columbia University. Here, Rossabi traces Mongolia's history and outlines its present-day challenges. |
The Qing background
The Chinese and the Mongols have had a long and tortured history over the past 700 years, with raids back and forth between Chinese and Mongols. Our story really begins with the Manchu conquest in the seventeenth century. The Manchus took over Mongolia by 1689 and defeated the last Mongol remnants in the 1750s. In fact, the Qing dynasty attempted to encourage a relatively equable and equitable rule over the population in Mongolia. They encouraged intermarriage between the Manchu ruling family and the Mongol princes and supported the practice and performance of Mongol rituals. They founded Mongol language schools, subsidized the translations of Mongol texts in Chinese and so on. |
Unfortunately, the Qing could not control its own officials and its Chinese subjects, and instead of an equitable rule you have, by and large, a tremendous Chinese exploitation of the Mongols in the eighteenth and nineteenth centuries--economic exploitation in particular. A considerable portion of the Mongol population was impoverished as a result of the economic domination of the Chinese: particularly, itinerant Chinese merchants who took advantage of the Mongols to place them in debt, a considerable portion of the Mongol herder population, as well as the Mongol princes who were placed in debt by the late nineteenth century. |
The arrival of the Russians in the late nineteenth century and the decline of the Qing dynasty began to challenge Chinese domination and provided an opportunity for the Russians to play an increasingly important role in Mongolia. There was a period of great discombobulation between 1911 and 1921, after the final collapse of the Qing dynasty in 1911 that provided an even greater opportunity for the Russians to play a role. With Soviet assistance and domination, the Mongols became the second Communist state, and the Mongolian People's Republic was eventually founded in 1924. |
Up until that point there had been considerable Chinese economic activity in Mongolia. There had been Chinese merchants, shops and sections of some of the towns in Mongolia. That all ended with the arrival of the Soviets and by 1930 most Chinese were excluded from Mongolia. They had either left of their own accord or conditions were made so difficult for them that they left. |
The Chinese under Chiang Kai-shek did not give up the idea that China was really the dominant force in Mongolia's part of China. When the Chinese Communists succeeded in 1949, it did not necessarily bode well for Sino-Mongol relations. In his interviews with the journalist Edgar Snow in the late 1930s, Mao Zedong said that Mongolia would inevitably return to Chinese jurisdiction after the Communist victory in China. He repeated this in an interview with another journalist a few years later. So the victory of the Communists in China was not necessarily beneficial for Mongolia. |
Economic, cultural and political relations began at that point and for a brief a period, from 1950 to 1964, there were extended contacts back and forth. In particular, Chinese laborers came to Mongolia to engage in a number of construction and infrastructure projects. Mongolia, for a variety of reasons, has a labor shortage, and the arrival of 10,000 or more Chinese was incredibly important in developing these construction projects. |
Sino-Soviet relations and their effect on Mongolia
The onset of the Sino-Soviet dispute, however, had its impact on Mongolia. Starting in the late 1950s and early 1960s, Mongolia had to make a choice as to which side to support; basically, it was no choice at all. |
Mongolia had been culturally under the jurisdiction of the Soviet Union; most of the Mongolians who left the country to be educated went to the Soviet Union for education. There was great cultural domination in Mongolia. The language was written in Cyrillic as of the 1940s, and the old Mongolian script was abandoned. In addition, the Soviet Union promised much more economic aid than China. As a result, many of the Chinese projects that had begun in the 1950s were abandoned, most of the Chinese laborers left the country, and you begin to get, from 1964 on, all sorts of attacks from both sides. |
The Mongols claimed that China still had the intention of dominating and taking over Mongolia, and because of its nuclear policies, in the late 1960s, China was a dangerous force in the world. Of course, the Mongols were also concerned about the fate of Mongols in Inner Mongolia and were particularly critical of Chinese policies in there that had led to the deaths of quite a number of Mongols. The exact figure is disputed, but somewhere around 20,000 or 30,000 Mongols may have died during the Cultural Revolution. |
In turn, the Chinese responded by proclaiming that Mongolia was simply a Soviet satellite dominated by the Soviet Union. The Russians had moved in, even culturally, by pricing books written in Russian at a much lower rate than books written in Mongolian so as to stimulate the population to master the Russian language. The Chinese also pointed out that Russian was the second language in the schools, and there were 250,000 youngsters who were supposedly coerced into learning the Russian language. So there's a considerable amount of hostility and animosity that continued through the 1960s and 1970s. |
It was only with the arrival and the coming to power of Gorbachev in 1985 that relations between China and Mongolia began to improve dramatically. Within the first year of his rule, Gorbachev gave a speech in Vladivostok on July 29, 1986, in which he made the proposal that the Chinese had been waiting for. One of the things that had happened in the 1960s with the onset of the Sino-Soviet dispute had been the stationing of a large number of Soviet troops in Mongolia--approximately 100,000. Gorbachev began the process in 1986 of withdrawing the Soviet military forces, which provided a signal for the Mongols to begin resuming relations with China. |
Within weeks of Gorbachev's speech, Mongolia and China signed a consular treaty. Shortly thereafter, delegations of scholars, writers, trade union leaders and members of friendship committees began going back and forth between China and Mongolia. One of the first exchanges actually involved wrestling teams, another kind of ping-pong diplomacy. |
China again
At the same time that Mongolia was fostering better relations with the Chinese, they simultaneously sought to widen their contacts with the outside world. Their greatest success occurred in 1987, with the establishment of diplomatic relations with the United States. At that point the United States, for the first time, recognized Mongolia as an independent country, and diplomatic and cultural relations, with limited economic relations, began between the two countries. |
The year 1989 was pivotal for Sino-Mongolian relations, as it was in lots of different areas. In June 1989, Tiananmen occurred. Amazingly enough, however, these turbulent events in China did not impede Chinese contacts with Mongolia. The Mongols agreed to minimize the events at Tiananmen, or at least not to let them interfere with the course of relations with China. |
The other important event in 1989 was the beginning of demonstrations against the Mongol Communist government in December of that year. As a result of hunger strikes and other demonstrations, the Mongolian government announced, by March of 1990, that new elections would be held and that a multiparty political system would be developed. The monopoly that the Mongolian Communist Party--or Mongolian People's Revolutionary Party, as it was known--had enjoyed would end at that point. |
The Soviet Union collapsed within the following year, and Mongolia was pretty much left on its own, without the subsidies, aid and loans that the Soviet Union had provided. As a result, Mongolia was forced to turn to international donors who immediately insisted on reforms, democracy and a market economy as preconditions for additional assistance. Liberalization of prices occurred and prices skyrocketed, particularly for essential products such as meat and rice. In return for this liberalization, this acquiescence to the program of international donors, Mongolia received about $220 million in loans and grants in 1991. In fact, that has continued through the year 2000. In June of 1999, international donors met in the capital city and pledged to provide $320 million in aid over the next 18 months. |
The official view in the Mongol government over the past decade has been that China has abandoned all efforts to expand into Mongolia. There's probably some merit to this. With no menacing Soviet troops in Mongolia, China doesn't need to fear for the security of its borderlands. The question is whether economic leverage that the Chinese have built up over the past decade will make it unnecessary to militarily dominate Mongolia. |
There is concern in Mongolia about the economic influence of the Chinese, but surprisingly, in quite a number of interviews that I've held with the implementers of Mongolian foreign policy in Mongolia, I've found a professed lack of concern about Chinese economic leverage. The minister of external relations in July of 1998 said that he didn't fear Chinese investment in land, industry or retail enterprises. The same view has been repeated over and over again in my conversations and the argument that these people make is that the technology that the Chinese will bring in will more than compensate for the hazards involved. What is the technology that is going to be brought in? What advanced technology that the Chinese have will make a substantial difference in terms of Mongolia? |
The general Mongol population appears less sanguine than its leaders. In a survey conducted in 1997 by probably the best surveyors in Mongolia about foreign countries, 79 percent of those surveyed expressed a desire for closer ties with Russia, 54 percent with Japan, and less than 30 percent supported greater ties with China. So there is concern on the part of the population. |
The Economist Intelligence Unit states that "Many ordinary people expressed the traditional fear that the growing presence of Chinese, mainly small businessmen, in Mongolia could be a prelude to a Chinese takeover." There is concern on the part of the population, although, as I say, the leadership, by and large, minimizes that fear. Despite all of this, there has been continual Sino-Mongolian diplomatic contact over the past decade, presidents and prime ministers back and forth, and if you look at all of the pronouncements, what's fascinating about them and the final agreements that they make after these is that the Chinese have always demanded that there is only one China. Now, why they should demand that of Mongolia I don't know, but there's only one China, and Taiwan is a province of China. |
Nonetheless, the Chinese have looked the other way regarding Mongolia's increasing economic relations with Taiwan, and the Taiwanese have, in fact, been very active in promoting relations with Mongolia. |
Probably the most significant result of all of these agreements and exchanges is an increase in Sino-Mongol economic relations. Trade has increased so dramatically that China is now Mongolia's largest trading partner. At one time in 1990, there was hardly any trade between Mongolia and China. So within 10 years China has become Mongolia's largest trading partner and is the largest investor in Mongolia. If you combine the statistics of Hong Kong and Chinese investment in Mongolia, they provide about 45 percent of foreign investment in the country. |
Chinese loans and technical aid to Mongolia have increased throughout the 1990s, and the pace of investment has actually quickened over the past two years. As of January 2000, the Chinese had about 400 of the 1,200 joint ventures in the country. That figure is China itself, not including Hong Kong, though supposedly the official figure for Chinese investment is 25 percent. Rumors abound that Chinese investors have surreptitiously used Mongol agents to bid for them in auctions that involve the privatization of Mongolian enterprises, and we'll see what that eventually does. |
There have been tremendous Mongol grievances about their relations with China. The cashmere trade is a great example of the increasing Chinese leverage over the Mongol pastoral economy. The elimination of tariffs, which occurred in 1997, encouraged by Western donors, has inadvertently strengthened the Chinese position. Raw cashmere can be sent out of the country, which has adversely affected the cashmere processing industry in Mongolia. The Chinese have been able to dominate the raw cashmere market with state-supported loans. This has had tremendous implications because the real money is in processed cashmere, not in raw cashmere. |
China's ability to take over this market is, in fact, a by-product of a policy promoted by international donors--the International Monetary Fund (IMF) and the Asian Development Bank--to get rid of any sort of tariffs or customs on any products, thereby making the Mongolian economy very vulnerable to Chinese market domination. Private Mongolian processing companies cannot compete with the Chinese, who have state subsidies and loans guaranteed by the Chinese government. So this policy, encouraged by the international donors, looks good on paper because it appears to get rid of impediments to trade. In fact, this has been disastrous for Mongolia, as most of the profits have gone to the Chinese traders and cashmere processors rather than the herders or the cashmere-processing industry. The IMF response is that Mongolian cashmere companies that cannot pay the market price should not be in production. This ignores the extraordinary advantages and the monopoly-like powers that the Chinese enterprises have. |
The Mongols also question whether many Chinese imports are safe and conducive to good health. There have been a lot of articles in the Mongolian press about the poor storage facilities used by Chinese traders, their sale of out-of-date merchandise, and the insects infesting many of the Chinese goods that are imported to the country. You can't really make a judgment about all of this because some of these accusations may reflect an age-old suspicion and hostility toward the Chinese, and it's unclear whether all of these things are actually happening. However, the reality of these accusations is somewhat immaterial. More important, many Mongols believe that Chinese products are injurious. |
Mongolia and the world
One of the main strategies that the Mongols have adopted with regard to China is opening up to the rest of the world. Recognizing the perils of dependence on China, the Mongol government attempted to cultivate relations with other states, and as early as 1990 they proclaimed an open-door policy. One by-product of this has been, of course, stronger relations with the United States and the arrival of international donors: the IMF, World Bank, Asia Foundation, Soros Foundation and International Republican Institute, among others. There has been a little bit of concern about the influence that these foreign advisers have played. The advisers, particularly the International Republican Institute, was instrumental in the elections in 1996, bringing together, or helping to bring together, a coalition that finally defeated the Mongolian Communist Party. Whether an International Republican Institute should be involved in the politics of a foreign country so directly is something that we in the United States may want to think about. |
International donor agencies should recognize that Mongolian enterprises cannot compete with state-supported, monopolistic Chinese enterprises on their own. A rigid emphasis on privatization and a market economy will simply make Mongolia even more vulnerable to Chinese economic domination. With its own native industries, Mongolia could develop a more equitable economic relationship with China--a link that is not colonialist in appearance and that would seek to overcome the tensions that have frequently characterized their relations since the time of Chinggis Khan. |
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