Moscow and Beijing Expand Rail Link Across Mongolia, Making Bilateral Trade Easier and Allowing Them to Compete for Rare Earths in That Country

Paul Goble

            Staunton, Sept. 4 – So much attention was given to the fact that the Mongolians did not arrest Vladimir Putin during his visit to Ulan Bator as was required by the International Criminal Court thus subverting the importance of that body that an even more important result of the Kremlin leader’s visit there has been largely ignored.

            That was an agreement between Putin and his Mongol hosts about the expansion of the trade corridor through Mongolia between Russia and Causehina that will shorten the distance trains and trucks have to travel between them by 25 percent, saving enormous sums and making economic cooperation easier (fondsk.ru/news/2024/09/04/evraziyskiy-koridor-rossiya-mongoliya-kitay-ne-tolko-ekonomika.html).

            Up to now, most trade between Russia and China has either had to go through much longer sea routes or via the Russian Far East; but under the new plans, which build on existing infrastructure, ever more of that trade will pass through Mongolia, something with political as well as economic consequences.

            One of the most important of these in the near term is that the expansion of this corridor will allow China to challenge Western involvement in the development and exploitation of rare earth reserves in Mongolia, reserves that Western companies had thought they had almost exclusive access to.

            Indeed, in the coming months, that may become a flashpoint in the West’s relations with both Moscow and Beijing because China, with Russian backing, has sought to corner the rare earths market in order to give it the whip hand as far as the development of computer components is concerned. 

Paul Goble

            Staunton, Sept. 4 – So much attention was given to the fact that the Mongolians did not arrest Vladimir Putin during his visit to Ulan Bator as was required by the International Criminal Court thus subverting the importance of that body that an even more important result of the Kremlin leader’s visit there has been largely ignored.

            That was an agreement between Putin and his Mongol hosts about the expansion of the trade corridor through Mongolia between Russia and Causehina that will shorten the distance trains and trucks have to travel between them by 25 percent, saving enormous sums and making economic cooperation easier (fondsk.ru/news/2024/09/04/evraziyskiy-koridor-rossiya-mongoliya-kitay-ne-tolko-ekonomika.html).

            Up to now, most trade between Russia and China has either had to go through much longer sea routes or via the Russian Far East; but under the new plans, which build on existing infrastructure, ever more of that trade will pass through Mongolia, something with political as well as economic consequences.

            One of the most important of these in the near term is that the expansion of this corridor will allow China to challenge Western involvement in the development and exploitation of rare earth reserves in Mongolia, reserves that Western companies had thought they had almost exclusive access to.

            Indeed, in the coming months, that may become a flashpoint in the West’s relations with both Moscow and Beijing because China, with Russian backing, has sought to corner the rare earths market in order to give it the whip hand as far as the development of computer components is concerned.