Mongolia pushing for rail, pipeline links with China, Russia, official says – by David Stanway (Reuters India – October 28, 2013)

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BEIJING – Oct 28 (Reuters) – Mongolia has agreed to establish a working group with China to oversee the construction of new road, rail and pipeline infrastructure connecting the two countries with Russia, a member of a Mongolian government delegation to Beijing said.

The official, speaking to Reuters on condition of anonymity, said landlocked Mongolia aimed to become a “transit corridor” to facilitate trade between its two giant neighbours and reduce the costs of delivering Russian commodities like oil and natural gas to energy-hungry Chinese markets.

The topic was high on the agenda during talks between Mongolian Prime Minister Norov Altanhayag and his Chinese counterpart, Li Keqiang, last week, according to the official, who is a senior adviser to Mongolia’s economics ministry.

Speaking by phone from the Mongolian capital, Ulan Bator, he said the working group would probably be set up soon and that Mongolia was open to allowing Chinese firms to invest and build the infrastructure. “Given the capacity that both countries can bring to the table, China is expected to be heavily involved in terms of financial resources and technology,” he said.

Soaring Chinese demand for commodities like coal has underwritten Mongolia’s rapid growth, with more than 90 percent of its exports sold to China.

But Beijing’s growing economic hegemony has caused disquiet among Mongolian lawmakers, with a decline in foreign investment last year caused in part by a hastily drafted law to limit foreign ownership in “strategic” sectors.

The law was designed to block efforts by China’s state-owned Chalco Group to acquire a majority stake in Mongolian-based coal miner South Gobi Resources.

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