VZCZCXRO7784
RR RUEHCN RUEHGH RUEHVC
DE RUEHUM #0424/01 2010525
ZNR UUUUU ZZH
R 200525Z JUL 07
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC 1313
INFO RUEHKO/AMEMBASSY TOKYO 2564
RUEHUL/AMEMBASSY SEOUL 2845
RUEHMO/AMEMBASSY MOSCOW 1830
RUEHOO/CHINA POSTS COLLECTIVE
RUCPODC/USDOC WASHDC 1321
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC 0637
RUEKJCS/SECDEF WASHDC
RHEHNSC/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUEHRC/USDA FAS WASHDC

UNCLAS SECTION 01 OF 03 ULAANBAATAR 000424 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV EMIN EINV MG CH
SUBJECT: VISIT OF CHINESE FOREIGN MINISTER YANG TO MONGOLIA 
 
ULAANBAATA 00000424  001.2 OF 003 
 
 
SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION. 
 
¶1. (SBU) SUMMARY: During his first trip abroad since  his 
appointment, Chinese Foreign Minister Yang Jiechi met with Mongolian 
officials June 30 to July 2 to forge closer political, economic, and 
commercial ties between the two northeast Asian neighbors. Both 
sides viewed this visit as a favorable continuation of the 
high-level political dialogue that has occurred between Mongolia and 
China over the past few years.  END SUMMARY. 
 
Political Developments 
---------------------- 
 
¶2. (SBU) On July 17, DCM and TDY PolOff Dan Nadel (notetaker) met 
with Mr. Tsend Batbuyan, Deputy Director of the Department of 
Neighboring Countries at the Mongolian Ministry of Foreign Affairs, 
for Mongolia's perspective on the PRC Foreign Minister's visit. 
Later in the day, DCM and PolOff met separately with Mr. Chai 
Wenrui, Chinese Embassy Counselor (DCM), and Political Counselor Sun 
Hongliang for their views of the visit.  Chai noted that FM Yang met 
July 2 with Mongolian President Nambaryn Enkhbayar, Prime Minister 
Miegombyn Enkhbold and Chairman of the State Great Hural 
(Parliament) Danzan Lundeejantsan. 
 
¶3. (SBU) Chai noted that the two FMs discussed enhancing cooperation 
between Chinese and Mongolian government ministries. He mentioned 
that there already existed a mechanism for consultation at the Vice 
Foreign Minister level and also for regular meetings between the 
respective foreign ministries' Asia departments.  More broadly, 
there have been several senior visits over the past two years in 
both directions, including visits to China by Mongolia's President 
and Prime Minister.  For example, Liang Guanglie, a member of 
China's Central Military Commission and Chief of the General Staff 
of the Chinese People's Liberation Army, visited Mongolia in late 
May, and Zhang Xiaoqiang, the Vice Minister in Charge of the 
National Development and Reform Commission, visited in June. 
 
¶4. (SBU) According to Batbuyan, one of the most significant results 
of Yang's visit was the beginning of a process of reviewing and 
examining the roughly 80 bilateral agreements currently in force 
between Mongolia and China. Legal experts in both governments plan 
to study these agreements and suggest amendments in order to better 
synchronize and, in some cases, update them. 
 
¶5. (SBU) Batbuyan said the GOM also raised the issue of opening two 
additional consulates in China, in the cities of Urumqi in the 
Xinjiang Uygur Autonomous Region, and Shenzhen in Guangdong 
Province. [Note: In addition to its embassy in Beijing, Mongolia 
currently operates two consulates in China in the cities of Hohhot 
and Erlian Hot, both in adjacent Inner Mongolia. End Note.] The 
Chinese indicated that they were willing to consider this request. 
 
¶6. (SBU) Given the importance of transportation to landlocked 
Mongolia, Batbuyan noted that the two parties discussed the 
continuing need to conclude an agreement between Russia, Mongolia, 
and China on issues involving transit between these countries.  The 
Foreign Ministers pledged to sign such an agreement at the earliest 
opportunity. 
 
Strengthening Economic and Commercial Ties 
------------------------------------------ 
 
¶6. (SBU) Chai noted that China has been the single largest investor 
in Mongolia for the past nine years, and has been Mongolia's number 
one trading partner for the past eight years.  During that time, 
China has invested over US$600 million in Mongolia, and total trade 
between the two nations in 2006 was valued at US$1.5 billion. 
 
¶7. (SBU) The Chinese Foreign Minister used his visit to promote 
greater access for Chinese commercial interests in Mongolia -- 
particularly in the mining sector -- and he did not come 
empty-handed.  According to Chai, under the largest agreement 
concluded during the visit, China agreed to donate 50 million Yuan 
(over $6.6 million) to the Mongolian government.  According to Chai, 
the focus of the grant is yet to be agreed, but some of the funds 
will be spent on the development of a sports complex, and it is 
possible that other funds will be spent on development of a new 
housing district.  Under a second agreement, China pledged to donate 
10 million Yuan (over $1.3 million) to support joint archaeological 
research and excavation in Mongolia. 
 
 
ULAANBAATA 00000424  002.2 OF 003 
 
 
¶8. (SBU) And finally, a Memorandum of Understanding was concluded 
between the Mongolian Academy of Sciences and the Chinese 
Seismological Institute, under which the two institutions agreed to 
cooperate on scientific research, and China pledged to provide 
equipment to monitor seismic activity in Mongolia. 
 
¶9. (SBU) For its part, the Mongolian government asked for greater 
Chinese investment in infrastructure, particularly focused on roads 
and railways.  The Chinese agreed last year to loan the Mongolian 
government US$300 million to build a hydroelectric plant on the 
Eegin River. 
 
Media Response 
-------------- 
 
¶10. (U) Both during and after the visit, Chinese and Mongolian news 
outlets expressed optimism for improved relations and discussed 
further potential for mutually beneficial cooperation.  Picking up 
on the statements of both foreign ministers, the press made much of 
the fact that this Mongolia visit marked the first of Yang's tenure 
as Foreign Minister. 
 
¶11. (U) Chinese media reaffirmed China's recognition of Mongolian 
autonomy, a historical sore point between the two countries and one 
Minister Yang hastened to salve.  Many Chinese news sources called 
attention to Speaker Lundeejantsan's acquiescence with the "one 
China" policy and President Enkhbayar's recognition of China as 
Mongolia's largest trading partner. 
 
¶12. (U) Mongolian news sources also focused on the fact that this 
was Minister Yang's first visit in his capacity as Foreign Minister 
and the first visit of such a high-ranking Chinese official in six 
years.  Most outlets focused mainly on the perception of what 
assistance China can provide for Mongolia, particularly in the areas 
of infrastructure, trade, mining, security, and education. 
 
Additional Topics of Discussion 
------------------------------- 
 
¶13. (SBU) According to Chai, the two foreign ministers did not 
discuss military issues in part because these issues were discussed 
during the recent PRC PLA Chief of Staff's visit.  But Batbuyan 
noted that Mongolia is interested in developing military and 
technical cooperation with China, and during the meetings between 
foreign ministers, both sides confirmed a mutual interest in 
developing greater cooperation in those sectors in the future. 
 
¶14. (SBU) In the realm of higher education, the Chinese government 
currently provides scholarships for 220 Mongolian students annually 
to study in China.  Chai noted that the Mongolians were pleased that 
an increasing number of such scholarships were being made available. 
 The neighboring Chinese region of Inner Mongolia also has its own 
program to provide scholarships to Mongolian students, covering 
costs for 100 students each year. 
 
¶15. (SBU) According to Batbuyan, the Chinese did not raise the issue 
of bias or ill treatment of Chinese living in Mongolia.  Batbuyan 
noted that many construction companies employ Chinese and other 
foreign workers.  Such workers enter on a one-month visa, and then 
overstay and become illegal laborers.  He said that the two sides 
are in communication regarding this problem, but it did not arise as 
a topic of conversation during the Yang's visit. 
 
¶16. (SBU) According to Chai, the Mongolian government expressed 
interest in assisting in the 6-Party Talks with North by playing 
host to one of the associated working groups.  (NOTE:  In a separate 
July 18 meeting with Japanese DCM Kobayashi, Kobayashi said he 
understood the GOM was interested in hosting the working group 
related to normalizing relations between the DPRK and Japan.) 
 
Comment 
------- 
 
¶17. (SBU) Both the Chinese and Mongolian governments viewed the 
visit as a great success.  Chai noted the great importance that 
China places on maintaining good neighborly relations, and spoke of 
the visit as building a solid basis for greater mutual trust and 
further partnership and cooperation.  Indeed, Presidential Foreign 
Policy Advisor Tsogtbaatar's personal analysis of the visit was that 
it reflected Yang's view that China had not paid sufficient 
attention to the relationship in recent years and had deliberately 
 
ULAANBAATA 00000424  003.2 OF 003 
 
 
sought to rectify this situation.  End Comment. 
 
MINTON