Tuesday, August 19, 2014

Mongolia welcomes Chinese investment, says Beijing before Xi visit

BEIJING: Mongolia welcomes Chinese investment, Beijing said Monday, as President Xi Jinping prepares to visit the country where there is growing opposition to overseas control of its vast, largely untapped mineral reserves.

The two countries are neighbours but Xi's trip to Ulan Bator on Thursday and Friday is the first by a Chinese head of state for more than a decade.

It comes with resource nationalism the major issue in Mongolian politics, while Beijing is constantly on the look-out for resources to power the world's second-largest economy.

In 2012 Mongolia tightened approval requirements for foreign companies seeking to do business in "strategic" sectors such as minerals.

China is the biggest investor in Mongolia, and also the largest market for its huge stocks of coal and copper.

The foreign investment law was enacted after China's biggest aluminium producer Chalco sought to take a stake in Mongolian company SouthGobi.

The move could have seen control of Ovoot Tolgoi, one of the country's biggest coalmines, fall into Chinese hands.

"From our contact with the Mongolian government, people and the business community I believe they welcome Chinese investment," assistant foreign minister Liu Jianchao told reporters at a briefing ahead of Xi's visit.

"They regard Chinese investment as a source of strength for their development. In energy and resources both countries have conducted fruitful cooperation."

The China Daily newspaper said a deal which gives landlocked Mongolia the use of "several" Chinese ports -- including the busy northern hub of Tianjin -- was expected to be discussed during the visit.

Xi will meet Mongolian President Tsakhia Elbegdorj, who will hold a "family banquet" for the Chinese leader and his wife Peng Liyuan, Liu said.

The two heads of state will "issue an important political document", he added, without giving details.

Hu Jintao was the last Chinese president to visit Mongolia, in 2003.

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