After a prolonged conflict between Russia-G7 (the Group of Seven advanced economies) remaining without any solution so far, now China and G7 are gearing up for a serious conflict which, if not controlled by the big powers, could escalate into a another cold war situation. America’s Asia pivot targeting China (and Russia) and China’s recent military action on South China Sea (SCS) have now placed G7 and China in a conflictual situation. The G-7 grouping comprises Britain, Canada, France, Germany, Italy, Japan and the United States. The EU is also represented in the club.
The 42nd G7 advanced economies’ summit, held on May 26–27, 2016 at the Shima Kanko Hotel in Kashiko Island, Shima, Mie Prefecture in central Japan, criticized and even warned against military operations on SCS. Russia is not a part of G7 as USA abandoned the G8 in March 2014 that included Russia and reverted back to G7. The G7 had then declared that a meaningful discussion was not possible with Russia in the context of the G8. Since then, meetings have continued within the G7 process, denying Russia a place on this important international forum of advanced economies.
Leaders of the G7 said they were concerned by the situation in the East China and South China Sea. They reiterated their commitment to maintaining a rules-based maritime order, according to international law, and urged the settlement of disputes by peaceful means, including judicial procedures such as arbitration. At the close of their formal session in Ise-Shima, G7 leaders fired a broadside across China’s bows over its behavior in the region, without mentioning Beijing by name. The foreign ministers had urged all states to refrain from such actions as land reclamations and “building of outposts on South China Sea for military purposes”. The G-7 leaders had stressed the importance of peaceful management and settlement of disputes through peaceful means.
Though the communiqué, issued at the end of the two-day summit on May 27, the G-7 did not mention China by name, but it is apparent the G7 is targeting only China. The G-7 leaders also condemned “in the strongest terms” North Korea’s fourth nuclear test in January and its subsequent launches using ballistic missile technology. These acts pose a grave threat to regional and international peace and security, they said, adding that they also deplored human rights violations in North Korea. On terrorism, the G-7 leaders said they will continue to work together to prevent the flow of foreign terrorist fighters and terrorism-related materials and equipment, as well as to counter terrorism financing. And, on the migrant crisis gripping Europe, the G-7 “encourages the temporary admission of refugees and establishment of resettlement schemes, to alleviate pressure on countries hosting the largest numbers of refugees”.
The G7 demanded that North Korea fully comply with UN Security Council resolutions and halt nuclear tests, missile launches and other provocative actions. The group condemned Russia’s “illegal annexation” of the Crimean peninsula from Ukraine. The declaration threatened further restrictive measures to raise the costs on Moscow but said sanctions could be rolled back if Russia implemented previous agreements and respected Ukraine’s sovereignty.
The G7 expressed concern over the East and South China Seas, where China has been taking more assertive action amid territorial disputes with Japan and several Southeast Asian nations. The G7 reiterated its commitment to the peaceful settlement of maritime disputes and to respecting the freedom of navigation and overflight. The group called for countries to refrain from “unilateral actions which could increase tensions” and “to settle disputes by peaceful means”.
Meanwhile, the refugee crisis gripping Europe is a problem that the whole world must deal with, G7 leaders said, as it called for beefed-up efforts to tackle the root causes of mass migration. The G7 also called large-scale immigration and migration a major challenge and vowed to increase global aid for the immediate and long-term needs of refugees and displaced people.
UN Secretary General Ban Ki-moon, International Monetary Fund chief Christine Lagarde and World Bank head Jim Yong Kim, the heads of the Organisation for Economic Co-operation and Development and the Asian Development Bank also attended the summit.
G7 summit focus on global growth
The Group of 7 industrial powers pledged on May 27 to seek strong global growth, while papering over differences on currencies and stimulus policies and expressing concern over North Korea, Russia and maritime disputes involving China. G7 leaders wrapped up a summit in central Japan vowing to use “all policy tools” to boost demand and ease supply constraints. G7 said, in a 32-page declaration, global growth remains moderate and below potential, while risks of weak growth persists.
Japanese Prime Minister Shinzo Abe said that global growth is their urgent priority, talking up what he calls parallels to the global financial crisis that followed the 2008 Lehman Brothers bankruptcy, said the G7 shares a strong sense of crisis about the global outlook. The most worrisome risk is a contraction of the global economy, led by a slowdown in emerging economies. Abe has stressed the need for flexible fiscal policy to sustain economic recovery, while German Chancellor Angela Merkel has been sceptical about public spending to boost growth. The G7 called global industrial overcapacity, especially in steel, a pressing structural challenge with global implications.
Abe told a news conference after chairing the two-day summit that there is a risk of the global economy falling into crisis if appropriate policy responses are not made. In the broad-ranging, the G7 committed to market-based exchange rates and to avoiding competitive devaluation of their currencies, while warning against wild exchange-rate moves. This represents a compromise between the positions of Japan, which has threatened to intervene to block sharp yen rises, and the United States, which generally opposes market intervention.
The G7 encourages international financial institutions and bilateral donors to bolster their financial and technical assistance. It said that a resolution to Syria’s civil war was crucial to plugging the flow of desperate people fleeing across borders. “The G7 recalls that only sustainable political settlements within countries of origin, including Syria, will bring lasting solutions to the problem of forced displacement, including refugees,” the communiqué said.
Large movements of people are a multi-faceted phenomenon, which requires addressing its root causes resulting from conflicts, state fragility and insecurity, demographic, economic and environmental trends as well as natural disasters. The statement came a day after European Council President Donald Tusk warned that the crisis was not just Europe’s problem.
Later, leaders from ‘advanced democracies’ met on Friday with representatives of emerging and developing countries in Asia and Africa. The so-called outreach program involves Chad, Indonesia, Sri Lanka, Bangladesh, Papua New Guinea, Vietnam and Laos. G7 host Japan said ahead of the meeting that it would zero in on Asia’s stability and prosperity including “open and stable seas” as well as United Nations sustainable development goals, with a focus on Africa.
The leaders pledged to tackle a global glut in steel, though their statement did not single out China, which produces half of the world’s steel and is blamed by many countries for flooding markets with cheap steel.
The G7 vowed a more forceful and balanced policy mix to achieve a strong, sustainable and balanced growth pattern, taking each country’s circumstances into account, while continuing efforts to put public debt on a sustainable path.
South China Sea
From economic issues, the G7 turned to a topically favourite theme of Chinese ‘interference’ in South China Sea and it appeared the issue got prominence in discussions than expected. Beijing has reiterated that it wants to protect itself from any possible US menace to protect its navigational rights on South China Sea. China is extremely dissatisfied with what Japan and the G7 have done.
The G7 statement angered China and led to Beijing summoning top envoys from the G-7 nations. Beijing lays claim to almost all of the South China Sea, and is now embroiled in a territorial dispute with Brunei, Malaysia, Vietnam, Taiwan and the Philippines over conflicting claims to territory in the waterway. Japan and China are involved in a separate dispute in the East China Sea. Chinese Foreign Ministry spokesman Hua Chunying said this G-7 summit organised by Japan’s hyping up of the South China Sea issue and exaggeration of tensions is not beneficial to stability in the South China Sea.
China was not pleased with the G7 stance. “This G7 summit organised by Japan’s hyping up of the South China Sea issue and exaggeration of tensions is not beneficial to stability in the South China Sea and does accord with the G7’s position as a platform for managing the economies of developed nations,” Foreign Ministry spokeswoman Hua Chunying said in Beijing. A ruling is expected soon on China’s claims to the South China Sea in a case that the Philippines had brought to the Permanent Court of Arbitration in The Hague. Beijing has lashed out at the tribunal for “abuse of power”, and said it will ignore its decision.
China’s foreign minister fired a pre-emptive shot at G7 leaders gathering in Japan, warning them not to “escalate tensions” over territorial disputes in the South and East China Seas. Last month, foreign ministers from the G7 angered Beijing by issuing a thinly veiled statement critical of its “island building” activities in the South China Sea over recent years. The issue is expected to be raised again as G7 heads of state and prime ministers begin two days of discussions in Ise-Shima. “We hope the G7 will focus on urgent economic and financial matters,” Wang Yi said at a briefing in Beijing. “We do not want to see actions that escalate tensions in the region.”
Beijing is locked in a dispute with G7 host Japan over rocky outcroppings in the East China Sea, stoking broader concerns about Beijing’s growing regional might and threats to back up its claims with force, if necessary. China, for its part is engaged in a furious diplomatic charm offensive among developing countries, offering aid and trade in what critics see as a naked bid to rally international support to its cause. The roster of countries Beijing claims back its position on the South China Sea includes Mauritania, Togo and land-locked Niger.
Washington is not a claimant in any of the disputes but has accused Beijing of militarizing the contested waters of the South China Sea. Vietnam and the Philippines are engaged in a number of territorial disputes with Beijing in the South China Sea, where the Chinese military has recently completed airstrips and other infrastructure on contested reefs and islets. Manila has successfully rallied international support through its decision to challenge China’s actions in a tribunal at The Hague — an international legal challenge that Beijing has refused to recognize.
John Kerry, US secretary of state, said the lifting of the Vietnam arms embargo was not aimed at China, despite an increasing number of close encounters between the two countries’ militaries. Even UK PM David Cameron, wants to be now China’s “best friend” in the west, urged Beijing to be part of a “rules-based world” and “abide by these adjudications”. The Pentagon recently complained that People’s Liberation Army jet fighters conducted a dangerously close intercept of a US spy aircraft. Chinese state media reported that USA and Japanese naval vessels had kept a close eye on PLA Navy exercises in the western Pacific.
Meanwhile, reports say in September Beijing will host Obama, Cameron and Japanese Prime Minister Shinzo Abe at a G20 meeting of developed and developing economies in Hangzhou, where Wan will make clear that his government would not tolerate a debate over regional territorial disputes. China say the G20’s central task is to promote growth and not dispute resolutions.
China fears that Japan and the US will use the G7 meeting to further isolate Beijing over its increasingly assertive posture in the region. The two countries are also leading members of the Trans-Pacific Partnership, a potential trading bloc that has pointedly excluded China from joining as an inaugural member. The reference to maritime issues comes as tensions build over Beijing’s claims to almost the entire South China Sea, a strategic body of water that encompasses key global shipping lanes. China’s maritime claims and ongoing militarization of islets and outcrops have angered some of its Southeast Asian neighbours, including the Philippines and Vietnam.
The complex puzzle of Canberra-Beijing ties, as diplomacy takes a back seat
Australia and China seems to be engaged in a repulsive tariff war targeting each other’s goods. Canberra is struggling to manage its complex economic relationship with Beijing even as it finds itself in the strategically opposite camp. How did things turn out this way? Here, I analyse.
There was a time when Australia under the Mandarin-speaking Prime Minister Kevin Rudd, who was in office from 2007 to 2013, had the highest level of warmth in relations with China.
The Labour premier saw a promising prospect of economic partnership with a rising China at that point of time, but gravely under-estimated the geopolitical threat that would be soon posed by Beijing, a mistake later governments would realise and is still striving to rectify.
Quad pullout and comeback
Rudd even pulled Australia out of the four-nation Quad grouping in 2008, a year after it was conceived by former Japanese PM Shinzo Abe, in a move to appease Beijing with which Canberra’s economic partnership was progressively moving upwards. But, nine years later, Malcolm Turnbull’s premiership brought Canberra back to the Quad as regional and global security dynamics witnessed a paradigm shift.
A decade later since Rudd took office, despite closer economic ties with Beijing, Canberra pushed for a closer alliance with the United States since 2017, the year Quad Security Dialogue was revived during the ASEAN and Related Summits in Manila.
It was a result of changes in security assessments by Canberra with regard to new threats and challenges from an increasingly assertive Beijing in the Indo-Pacific and beyond.
The rift between Australia and China further widened, earlier this year, when the Australian government supported an inquiry into the origins of the novel coronavirus, annoying China where it originated. Australian politicians also became increasingly divided on hawkish and dovish lines.
Huawei and ZTE ban
Tides were turned in 2018 when Australia became the first country in the world to ban Chinese telecom giants Huawei and ZTE from 5G trials and rollout, citing security concerns, as these companies ‘allegedly’ had links to the Chinese ruling establishment which they deny.
Beijing also reciprocated with tit-for-tat measures from time to time. The latest in line of such measures was the imposition of temporary anti-dumping tariffs up to 212.1 per cent on Australian wine imports with effect from November 28, this year.
Ongoing tariff tensions
2020 saw a foray of imposition of tariffs and reciprocal duties from both sides right from the beginning of the pandemic. Attempted mergers and acquisitions by Chinese companies involving companies in Australia were also blocked by Canberra citing security reasons.
Adding oil to the fire, anti-dumping investigations were initiated by both sides against each other, for using its findings as rationale for imposing more tariffs on different sets of goods such as aluminum, steel, paper, coal, copper, sugar, log timber, and barley.
What will be the fate of the 2015-signed China-Australia Free Trade Agreement (ChAFTA)?
The worsening ties might take a toll on ChAFTA as it readies for a five-year review next month, notwithstanding the other broad-based trade pacts in which both countries are participants such as the recently-signed, 15-nation Regional Comprehensive Economic Partnership (RCEP).
ChAFTA took about a decade to complete and led to zero tariffs on many goods, but RCEP is still in its infancy.The main issue is not whether a review of ChAFTA is possible, but how to prevent the looming prospect of Canberra and Beijing retreating from the current commitments directly or indirectly that would effectively reduce the pact into a state of coma.
As ChAFTA goes for review in December, the most likely outcome could be both countries agreeing to maintain the deal’s status quo. If any of the parties wishes to terminate the pact, there is a six-month notice period after which they can leave, with or without a review.
Still economic partners, but political rivals
Today, China has positioned itself as Australia’s largest trading partner. Moreover, Australia strongly benefits from its close proximity to the vast markets of China and Japan which together represent over 40% of all Australian exports, in which a little over 32% amounting to $89.2 billion, are exclusively to China, as data from 2019 show. Despite this, Canberra and Beijing remain at odds politically.
Exercise Malabar 2020 and beyond
One of the striking questions in the strategic circles of all Quad partner countries is, will Australia continue to take part in the annual Exercise Malabar in the coming years, annoying Beijing further?
While Japan is a strategic partner in the Quad, ties with China are moving on an adversarial path, particularly worsening since Canberra took part in the annual Exercise Malabar in the Indian Ocean this month, after a gap of 13 years since it left the mega naval war games.
The exercise by the four Quad partners of India, United States, Japan, and Australia is apparently a warning to Beijing’s naval ambitions in the waters of the Indo-Pacific.
Supply Chain Resilience Initiative
In fact, all the Quad partners and other democracies in the Indo-Pacific wish to decouple itself from over trade dependency on China. But, domestic economic realities prove otherwise. With a raging pandemic and the unravelling US-China cold war threatening supply chains, Japan has recently put forward an idea – the Supply Chain Resilience Initiative or SCRI.
It is a trilateral approach to trade, with India, Australia, and Japan as the key-partners aimed at diversifying its supply risk across a group of supplying nations instead of being disproportionately dependent on just one, apparently keeping China in mind.
Despite all these measures, the prospect of closing of huge Chinese markets for Australian exports, owing to a disproportionately high level of tariffs is haunting domestic producers in Australia that could potentially make Australian wine largely unmarketable and non-feasible in Chinese markets.
Ineffective diplomatic efforts
Current Australian PM Scott Morrison has been trying to bridge gaps in a reconciliatory tone by stating that his government’s actions are wrongly seen and interpreted by some only through the lens of the strategic competition between China and the US. But, Beijing doesn’t seem satisfied, as evident in the decision to impose the recent set of disproportionate tariffs on wine.
Loss of businesses for Australian domestic producers is already hurting the Australian economy badly as goods remain stalled at ports. But, the behemoth of Chinese economy appears to be largely resilient to adverse impacts, compared to the Australian economy.
Australia’s producers and farmers are largely unhappy and unsatisfied with the way Canberra is dealing with Beijing as it directly threatens their livelihoods.
As things turn out worse, Canberra will have to strategise newer options to effectively balance geostrategic and economic considerations with regard to Beijing, possibly through the diplomatic route, in a way to immediately diffuse the prevalent confrontational approach to come out of this diplomatic impasse.
Is China on the brink of a food crisis?
It is not a secret that the current COVID-19 pandemic has been affecting people all around the globe. The virus touched almost all spheres of regular life – i.e. it resulted in temporary or permanent closure of businesses, a rise in the unemployment rate, inability to physically spend time with family and friends. Such drastic changes in times of uncertainty significantly impacted the well-being of the world population. Moreover, Food and Agriculture Organization of the United Nations (FAO) warned about the emerging food shortages worldwide. According to FAO statistics, global food prices have been on the rise for four consequent months, hitting their maximum in September 2020. China – the place where the virus originated – is one of the states that have been seriously affected by the disruptions, including production and distribution of food.
In his speech on August, 11 Chinese leader Xi Jinping did not admit any food shortages. However, he promoted food security through the campaign “operation empty plate,” thereby encouraging people to stop wasting food. It is interesting to note that Mao Zedong introduced a similar food campaign before the 1959 Great Chinese Famine. Meanwhile, there has undoubtedly been a significant increase in food prices in China. Many experts claim that China is on the brink of a food crisis that has been manifested as a result of lockdowns, infected livestock, and poor weather conditions. It is difficult to give any predictions or estimations about the future food situation in China because the country does not share enough of its data with the rest of the world, yet it is possible to answer the question why the state faces food difficulties.
Average food prices increase
The National Bureau of Statistics of China reported that, on average, food prices have increased by 11.2% compared to 2019. The price level of vegetables increased by 6.4% in one month; egg prices soared by 11.3% within the same period. Pork prices grew the most, by 52.6% compared to the last year’s statistics. Why is it important?
Firstly, many workers and their families who faced loss or decrease of income or remittances became food insecure. That, in turn, has had social repercussions for the overall level of crime, health concerns among adults and infants, high death rate, different demographic and economic challenges. Furthermore, international trade will also suffer: due to the lack of labor force Chinese imports in foreign countries will seemingly increase in price.
Secondly, China, along with other countries, was in a period of recession earlier this year. Food insecurity will cause difficulties in coming out of this financial downturn.
The impact of lockdowns on food supply chains
One of the main factors contributing to the declining agricultural productivity and spiking food prices in China is the restrictions on personal mobility and transportation of goods. In January Chinese authorities adopted measures to limit mobility within the country; they imposed “city lockdowns, traffic control, and closed management of villages and communities.” Such restrictions impacted food supply chains. For the production part many workers experienced difficulties getting to work that created a shortage of physical labor. That is why some crops were not picked, others were not even planted. As a result, the supply of agricultural goods decreased. On the other hand, at the beginning of the year, the demand for them also fell as restaurants and bars were closed. Thereby, many crops went to waste, while farmers did not make enough profit to purchase the seeds and fertilizers for the next season. It is a problem because businesses continue to open up, raising the demand and prices on crops. Immobility also impacted the distribution of seeds and fertilizers to the farms that disrupted the plantation season. Furthermore, the distribution of agricultural goods to grocery stores became difficult. Particular inconveniences associated with the restrictions on mobility all added up to the spike of prices on crops.
African Swine fever outbreak
Another factor impacting the emerging food crisis in China is the failure to rebuild last year’s loss of pigs due to the infection. Chinese porcine farms were hit by the African swine fever outbreak that infected and killed a large number of pigs (40% of total Chinese pigs’ population), decreasing the supply but increasing the prices on pork in 2019. According to China’s National Bureau of Statistics, pork prices were 52.6% higher in August this year than the year before, while corn prices – the main porcine fodder – increased by 20% compared to last year. Chinese farmers failed to improve the situation in 2020 due to severe flooding. The increased amount of precipitation caused considerable losses of corn and thus the inability to feed pigs. China began to import crops from abroad – particularly, corn from the US. As the United States Department of Agriculture (USDA) stated, China had been importing 195,000 more tonnes of American corn than the year before.
Shuttered diplomatic relations between China and Western states
Some experts claim that Chinese diplomatic relations with such Western countries as Australia, the US and Canada shattered due to the fire of four ballistic missiles on the Indian border on August, 26. These states are China’s major food exporters. If their diplomatic relations with Beijing worsen, then the trade has a high chance of being negatively affected as well. In other words, Chinese imports of crops have the risk of becoming more expensive, meaning that the prices of pork and other goods might rise even more.
Severe flooding and drought
Finally, worsened weather conditions – some parts of China experienced drought, others were hit by flooding – led to a decrease in crops and a significant increase in food prices. Southern, Central and Eastern China underwent a period of heavy rain and the worst flooding in the last hundred years. Excessively high water levels in major Chinese rivers, including the Yangtze River, resulted in the evacuation of 15 million people in July 2020. Moreover, the flooding destroyed 13 million acres of agricultural land, which is estimated to cost at least $29 billion of economic damage. In the meantime Northern (Xinjiang province) and Southwest (Yunnan province) China have gone through a period of severe drought. In April 2020 nearly 1.5 million people in Yunnan province were caught in an emergency situation: shortages of drinking water, damage of hundreds of hectares of crops and livestock. Consequently, the supply of many agricultural goods and pork decreased, which spiked the prices on these goods.
Chinese long-term prospects toward food security
To conclude, immobility, African swine flu, worsened weather and security conditions led to the growing food shortages and increasing food prices in China. This being said, the Chinese government has been working on that problem. It has taken special measures to ensure sufficience of agricultural goods by investing in various disaster relief funds for different crops, particularly rice and wheat. For example, Chinese authorities allocated 1.4 billion yuan to save the agricultural harvest in Hubei province. Due to the substantial loss of agricultural products, China has also increased its imports. General Administration of Customs reported that China’s grain imports rose by 22.7% in July 2020 compared to the previous year. Meanwhile, the Chinese leader took a gentle approach to solve this problem. He did not announce the issues related to the insufficient number of crops; instead, he adopted a program for encouraging people to be more frugal with their eating habits. The Chinese Academy of Social Sciences followed the same path as it denied anticipation of a food crisis in the short-term perspective, yet warned about possible food shortfalls by 2025 if no agricultural reforms take place. As of now, China is not on the break of a food crisis; however, its shuttered prospects for long-term food sustainability are subject to dangerous repercussions.
From our partner RIAC
China and Mongolia: A Comprehensive and Never-Ending Strategic Partnership
Mongolia is an exceptional country when it comes to Eurasian geopolitics, linking China with Russia, two great countries in terms of military and economic capabilities, geographical area and population. In June 2016, the China-Mongolia-Russia Economic Corridor (CMREC) was announced in order to consolidate friendly relations and promote economic exchanges for the success of the Belt and Road Initiative. Many reports indicate the great position of Mongolia on the Chinese economic map as a pillar of the modern Chinese initiative. Mongolia is a major economic partner of China, and the Chinese administration aspires to forge permanent relations of cooperation and coordination with Mongolia by virtue of its common geography and strategic location, in order to open up through it to Russia and other Mongolia is a key economic partner of China, and the Chinese administration aspires to forge permanent relations of cooperation and coordination with Mongolia by virtue of its common geography and strategic location, in order to open up through it to Russia and other international partners.
Mongolia is rich in natural resources, for example the mining industry provided up to 30% of GDP and almost 90% of exports, but its economy is not as developed compared to China. Some economic reports indicate the great economic benefit to Mongolia from the China-Mongolia-Russia Economic Corridor. Mongolia is expected to witness unparalleled economic growth in terms of international economic cooperation, which will positively affect the national economy. The Mongolian economy depends heavily on China’s investment; data of the two largest ports in Inner Mongolia Autonomous Region in northern China indicates enormous economic benefits. In the chart below, the continued economic progress achieved in Inner Mongolia is shown. In addition, rail trade increased by 16 percent year-on-year to 11.2 million tons in 2017. In the same year, 570 trips were made on the China-Europe railways passing through Ernhot (a county-level city of the XilinGol League, in Inner Mongolia Autonomous Region, located in the Gobi Desert along the Sino-Mongolian border, across from the Mongolian town of Zamyn-Üüd).
The Belt and Road Initiative aims for mutual profit, cooperation and peaceful communication. China shares an ancient cultural history with Mongolia, long common borders, and economic cooperation that has never stopped. The strategic geographic location of Mongolia makes it a priority for China on the new Silk Road, in addition to the richness of natural resources and livestock that China needs.
The Mongolians are a horse-loving people, a country known for its large number of horses. Mongols without horses are like birds without wings. Despite globalization and the great economic progress in the neighbor (China), as well as the cold weather and difficult geography, the Mongolians did not abandon their traditions and the Mongolian way of life still exists today. In Mongolia there are herders of horses, camels and cattle to benefit from milk, meat, wool, etc. During the pandemic in China, for example, President Battulga set up what is known as “Sheep Diplomacy” where Mongolian President donated 30,000 sheep to China. This initiative indicates the Mongolians’ positive intentions towards the Chinese and the desire to open up more. In this context, I would like to point out that China is a big importer of meat and the Chinese demand for meat is constantly increasing, as shown in the chart below. Here is a great opportunity for Mongolia to increase its exports of meat to the Chinese market.
The reading of Mongolian history indicates that this country has passed through periods of prosperity. Mongolia may be a good example of power and rule, as its borders extended to many countries during the rule of Genghis Khan (1162-1227), the man whom the Mongolians consider their historical leader and has turned into a hero and a national symbol. The Mongolians did not abandon their land despite the cold weather and difficult geography, indicating that they are a deeply rooted people with land. Mongolia, with its vast territories and few people, has turned into a meeting place for Russia and China, and a strategic center for Chinese economic expansion. Therefore, it is impossible for the Chinese administration to abandon the partnership with Mongolia.
The Mongolian economy is heavily dependent on livestock, and the number of pastures has increased significantly since the Soviet era because of the transfer of ownership to the people. However, the government is still not able to provide all services to citizens “the government has failed to promote education and health care and veterinary care in pastoral communities, so there is no longer any incentive to stay in rural areas” said Sarol Khuadu, an official at the Institute for Environmental Research in the Mongolian capital. The policy, which no longer places much emphasis on the countryside, has led to the transfer of large numbers of citizens to the capital and to engage in the world of money and business.
Unfortunately, the Mongolian government is not working seriously to support citizens in remote areas. The conditions of life are not good and the loans granted are high interest, in addition to the weather that adversely affects their businesses. In order to help the poor and rural people, in cooperation with national governments, humanitarian, development and scientific partners, FAO has developed an early warning approach by monitoring risk information systems and turning warnings into proactive actions. International organizations contribute to permanent humanitarian and social assistance in Mongolia.
Mongolia’s strategic policy through the “Mongolia Steppe Road Program 蒙古国“草原之路” is largely in line with the belt and road initiative, which is a road connecting Mongolia, China and Russia. Consequently, Mongolia, a country that mainly depends on the agricultural sector, will be a center for economic communication between China and Russia, and thus will witness a great economic development. The Steppe Road Program aims to boost Mongolia’s economic standing and create an advanced network of infrastructure for communication with China and Russia and build an oil and gas pipeline. In 2014, during his historic visit, Chinese President Xi Jinping raised the level of relations between the two countries to “Comprehensive Strategic Partnership Relations”. Since then, bilateral cooperation has begun to move faster.
China has never abandoned Mongolia; it is a country of advanced strategic location as a bridge between Asia and Europe, in addition to the important agricultural sector in Mongolia which benefits China greatly, not to forget to mention the China-Mongolia-Russia Economic Corridor which has become an important part of the belt and road initiative and a key component of Sino-Russian cooperation.
The relationship between China and Mongolia today is an ideal example of the bilateral relationship between two neighboring countries. Cultural, economic, political and tourism communication is in continuous progress between the Chinese and Mongolians, and the Belt and Road Initiative will push this communication forward. The Chinese aspire to increase free trade areas and economic connectivity through a developed infrastructure network.
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