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Let’s not misread Mongolia’s supposed ‘rebalance’ to Russia and China

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In Brief

The close timing of Chinese president Xi Jinping’s and Russian president Vladimir Putin’s recent visits has led a number of analysts to claim Mongolia has abandoned its ‘Third Neighbour’ diplomacy — a long-held policy to build relations with non-border countries — for a consortium with Beijing and Moscow. Pointing to Mongolia’s uneven economic relations with Beijing, dependence on Russian oil and gas imports and slowing growth, these analysts argue that Mongolia has ‘rebalanced’ to China and Russia out of necessity.


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But this reasoning is not only short-sighted, it also represents a fundamental misreading of trends in Mongolia’s domestic and foreign affairs. Closer consideration of current developments in Mongolia reveals a different story.

Mongolia’s tactics should not be conflated with its strategy. Since 1994, Mongolia’s foreign policy strategy has been to ensure its national security and economic growth through widespread engagement with as many states as possible. Mongolia’s engagement with China and Russia — both neither new nor all-encompassing — is a tactic to achieve this strategy, not a strategy itself. Mongolia maintains similar tactical contacts with states as diverse as Canada, Turkey, India and Japan.

Often misunderstood, Mongolia’s Third Neighbour Policy is a three-part strategy of economic, political and military engagement. The tactical economic engagement with China (supposedly the main indicator for the ‘rebalance’ thesis) is just one limited component of Mongolia’s overall foreign policy approach. Mongolia maintains deep political engagement with a wide range of states and international institutions, including Japan, Germany, Hungary, South Korea, North Korea, and the United Nations. The military component also remains robust, particularly in relation to the United States and the UN. If anything, these aspects of the policy have strengthened as multilateral economic exchange has weakened.

The third neighbour approach is not simply a policy preference; it is a national security priority. Both the 2010 Foreign Policy and National Security Concepts identify diversity in economic, political and military relations in security terms and assign the state the responsibility to maintain such diversity. Any deviation from the policy would not simply be a matter of contingency. It would be fundamentally abandoning the state’s role in national security.

Mongolia’s lower GDP growth — resulting from a slowdown in mining and falling global commodities prices — does not mean politicians have no choice but to look to their immediate neighbours for support. Besides rising inflation, the current economic slowdown has not affected rising living standards as few directly depend on the mining sector for their livelihood. The majority of urban Mongolians make their living from sectors that have developed outside of mining, including agriculture, tourism, construction and services. While a long-term downturn in mining would affect these sectors and result in a lower tax base, as yet, the slowdown’s effects are limited to the hyper-wealthy who are commercially involved in the mineral sector.

If anything, the slowdown is contributing to a more egalitarian, balanced economy that is not solely dependent on the natural resources sector. It has not led to a sudden sense of weakness. Mongolia has long needed more balanced growth and will benefit from it in the long term if the country’s leaders enact the right policies.

Mongolian leaders do not have the ability to enact policy that runs counter to public opinion without consequence. The majority of the Mongolian people support the third neighbour approach, whether as a specific policy or guiding principle. They are anxious to avoid dependency on China and keen to develop ties with countries  like South Korea, Japan and the United States, as well as communities like  the European Union. This preference is evident both in annual public opinion polls — in which Mongolians consistently rate China as the least desirable country with which to build closer relations — and the ubiquity of Western consumer goods. Any Mongolian politician that realigned the country’s foreign policy against these preferences would open himself to charges of betrayal — a risky business for a politician in a democratic country.

The ‘rebalance’ thesis fails to consider Mongolia’s relations with China and Russia from either Beijing’s or Moscow’s perspective. Both China and Russia are engaged in proactive diplomacy toward Mongolia, and other periphery states, for their own foreign and domestic reasons. Chinese president Xi Jingping has travelled to most of the states in Central and Inner Asia as part of his new periphery diplomacy. China is working to convince these same states to support its New Silk Road initiative, through which it seeks to expand its economic and diplomatic influence into Central Asia and onto Eurasia.

Similarly, Russia is intent on re-establishing its influence in Central and Inner Asia through economic and diplomatic engagement. Moscow’s own ‘rebalance’ to Asia is even more important following economic sanctions from the West over Ukraine and Russia’s self-perceived need to compete with China in areas over which the Soviet Union either had direct control or maintained influence.

Taken together, these points illuminate the current ‘rebalance’ argument’s failings. Mongolia is not in the process of abandoning its relations with other states for the sake of a trilateral agreement with China and Russia. Instead, the nature of its foreign policy is undergoing an internal tactical shift. Economic ties with China are deepening and political and military linkages with the West are growing. This diversity of interaction is at the heart of Mongolia’s Third Neighbour approach and is a clear indication the strategy is alive and well.

Jeffrey Reeves is an Associate Professor at the Asia-Pacific Center for Security Studies.

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