China-Mongolian coal trade impacted by COVID-19 flareups; bilateral trade expected to reach new highs when pressure eased
Published: Oct 21, 2021 01:37 AM
Mongolian Ambassador to China Tuvshin Badral Photo: Yin Yeping/GT

Mongolian Ambassador to China Tuvshin Badral Photo: Yin Yeping/GT

China and Mongolian bilateral trade is facing a big impact posed by the sporadic COVID-19 outbreaks in some parts of North China's Inner Mongolia Autonomous Region and the strict but necessary preventative measures on the border. However, with the joint efforts on both sides that are now under close communication, the pressure on the border is expected to ease, possibly lifting bilateral trade volumes to new historic highs, the Mongolian ambassador to China told the Global Times.

Talking to the Global Times on the sidelines of the First BFA Global Economic Development and Security Forum in Changsha, Central China's Hunan Province, the Mongolian ambassador to China, Tuvshin Badral, said on Wednesday that the latest local outbreak in Inner Mongolia Autonomous Region has greatly impacted bilateral trade and transportation of goods.

Currently, there are 13 border ports between China and Mongolia, of which six are open for movement of goods and another two are being used for exports of coal and other minerals, the Global Times learned.

While the two main ports for coal and mineral exports are working as normal, there are rising pressures on border traffic with the implementation of the strict epidemic preventative measures.

The daily number of trucks transporting coal between Mongolia and China is about 500 and it is expected to reach 600. But this is far from enough given the fact that before the COVID-19 pandemic, over 2,000 trucks crossed the border, the ambassador said.

Mongolia has around more than 3,000 Mongolian drivers engaged in cross-border transportation of coal. In order to continue with transportation under the existing COVID-19 border restrictions, drivers must take nucleic acid tests twice a day, one in Mongolia and the other in China, Badral said, an indication that cross-border transport has been done under relatively low efficiency.

Despite the challenges, the ambassador said that both sides are now discussing various options to speed up coal transportation such as using self-driving vehicles to prevent infections at the border.

Also, in order to add to the current transport capacity, Mongolia has proposed additional options for coal transportation, including using coal containers in a closed circuit transport to decrease the risk and prevent COVID-19 outbreaks at major border ports of Mongolia and China, as well as helping increase the volume of coal exports to China, Badral said.

Moreover, Chinese and Mongolian governments agreed last year to consider opening railway transports at major border points. 

Currently, both sides have already reached common ground on building cross-border railways at the Ganqimaodu port in Inner Mongolia Autonomous Region and a joint declaration is expected to be signed soon before the railway project starts, he said.

For the project to be completed around 20 kilometers of railways need to be linked. 

This railway is very important for bilateral trade as it is close to the mines and once it starts to operate it is expected to cut down the current transportation costs by three times, Badral said. Transportation operations are expected to open next year.

After the opening of the railway, exports of coking coal from Mongolia to China are expected to increase by 10 to 20 million tons, an increase of 50 percent from the current 32 million tons per year.

While both sides are looking into the possibilities for quicker border traffic under strict epidemic prevention, China and Mongolian bilateral economic and trade ties will be further deepened and consolidated.

The Mongolian ambassador expects the trade flow to reach a $10-billion historic target next year.

In addition to coal, Mongolia is also exporting iron ore to China. Badral expects to increase exports in the future, which will have more possibilities once the transport capacity on the border is upgraded.

The ambassador said that Mongolia is ready to increase the export of food products, such as dairy and meats, as well as wool and cashmere to China as part of its commitment of diversifying its exports to China and beyond.

"China is a huge market and we believe there is a vast potential for new areas of trade between Mongolia and China," Badral said.