Booming quaint town of Erenhot

Located in Inner Mongolia, Erenhot is China’s only railway port that is seeing good times with trade jumping from RM141mil in 1991 to RM19.6bil last year.

A DECADE ago, entrepreneurs from other cities and provinces moved to the town of Erenhot in Inner Mongolia autonomous region seeking greener pastures.

They had a vision to ride on the booming trade between China and Mongolia and earn their first pot of gold in this quaint town.

Trade jumped from US$46mil (RM141mil) in 1991 to US$6.4bil (RM19.6bil) last year. Tourist arrivals from Mongolia to China increased about 2.5 times to 994,200 compared with only 399,000 in 2000.

And this has given businessmen the confidence to do business in Erenhot; not to mention that it is China’s only railway port bordering Mongolia.

Shopowner Bian Ming, who sells jackets at the Wenzhou International Shopping Centre, said he enjoyed great sales in the last few years especially during winter.

“Almost all our customers are from Mongolia. They come to Erenhot by train or car and then spend a day shopping for clothes.

“Most of the apparel traders sourced their goods from wholesale markets and factories in other cities in China. We will buy outdated clothes from these wholesalers and manufacturers at a cheaper price and resell them to our customers,” he said in an interview at his shop recently.

Xiao Yingdi, a home appliance seller, said she quit as a farmer in her village and tried her luck doing some business in Erenhot in 1993.

She said to serve her customers better, the traders would have to learn Mongolian or hire sales assistants who speak the language.

“Many customers are more picky now as they even look for electrical appliances that have labels and instruction handbooks written in Mongolian. It becomes harder for us to satisfy them because our goods come from Chinese manufacturers,” she said.

The shopping centre is one of the two largest commercial complexes in Erenhot that cater for Mongolian customers. It covers an area of 50,000sqm and is home to about 600 companies.

Last year, the companies recorded total sales of 260 million yuan (RM125mil). The shopping centre was built in 2005 to replace the old China External Trade Market which became too crowded.

More than 70% of the construction materials, electronics, food and produce in Mongolia are imported from China. The trade boom has opened up opportunities for other businesses such as logistics, hotels, restaurants, supermarkets and travel.

After enjoying a good run for years, businessmen in the township with a population of 100,000 are feeling the pinch of the economic slowdown caused by the US and euro crisis.

“Since this Chinese New Year, our business has slowed down. More and more Mongolian customers would rather travel further to Beijing and other cities to buy their goods,” Bian said.

Xiao said: “Due to stiffer competition within and outside Erenhot, I must now sell my products at a much lower price.”

They said the increase in rent and consumer prices had worsened the situation.

Despite the setback, Erenhot mayor Bao Chongming believes that it would be short-lived and the special historical and geographical connection between China, Mongolia and Siberia would continue to drive Erenhot’s economy.

“Mongolia and Siberia are one of the regions with the largest mineral deposits in the world, but their light industry is not so developed. Erenhot is only about 600km from the Bohai Bay Economic Rim where our industrial products can be exported to Mongolia and Siberia.

“In return, the minerals from this region can be imported to China. We can complement each other and capitalise on each other’s advantages,” he said.

He said Mongolia achieved a 27% economic growth last year and China hoped to expand economic links and open up each other’s markets amid the rapid development in Mongolia.

He said the railway port in Erenhot could handle a throughput capacity of 10 million tonnes and more than two million visitors crossed the Erenhot border into China, making it a strategic trading and logistics hub in the development of Sino-Mongolian ties.

“The Erenhot government recently organised a business delegation comprising Chinese companies to invest in the infrastructure development in Mongolia, such as a road designated for heavy vehicles connecting Erenhot and Ulan Bator (which is the capital of Mongolia).

“By linking these two cities and Sainshand where Mongolia’s only heavy industrial park is located, we hope that this will further enhance economic cooperation in the area,” he said.