#1INSTITUTE FOR STRATEGIC STUDIES NATIONAL SECURITY COUNCIL OF MONGOLIA CTPAT CHANFAA The Current Situation for Foreign Trade Between Mongolia and China, Future Trend Enkhtaivan Erdenebileg#2• Foreign trade of Mongolia In last decade, Mongolia traded with about 160 countries from all over the world, Total trade turnover reached USD 16.1 billion (2021), • USD 9.2 billion - exports USD 6.8 billion - imports Key partner countries: China, Russia, United Kingdom, Switzerland, Japan, South Korea, USA, Singapore-94%#3China Destinations: $8 $100 $1k $10k $100k $1M $10M $100M $1B $6B $10 Exports 2011-2021 Singapor 0.71% South Korea 0.53% Chinese Talpel 0.38% Trade Value $8B $7B $6B $5B $4B $3B $2B $1B $0 Switzerland Coal Briquettes 27.2% 11% Copper Ore Russia Japan 0.36% United Thailand 0.29% Kingdom 1.11% Italy 1.02% Germany 4.89% 76.6% Canada 0.92% 0.32% United State 0.27% 27% Structure: Gold Copper Ore Coal Briquettes Iron Ore Gold 7.23% Zinc Crude Petroleum Ore 6.09% Feldspar 1.97% 2.08% Molybdenum Precious Ore 0.8% Lead Ore 0.48% Matal Ora Ore 0.34% Animal Hair Prepared Wool or 3.17% 0.18% Animal Hair 0.22% 16.5% Horse Refined Meat Copper 0.41% 1.26% 0.17% 0.17% 0.31% 0.33% 0.11% Lipit 0.45% 0.18% 0.21% 0.13%#4China 35.4% Origins: Imports: 2011-2021 $1 $10 $100 $1k $10k $100k $IM $10M $100M $1B $2B Trade Value $7B $6B $5B Structure: $48 Mineral fuels, mineral oils and products of their distillation $3B $2B Machinery and appliances $1B $0 Vehicles and their parts Japan Russia United States Mineral fuels, mineral oils and products of their distillation Vehicles and their parts Miscellaneous Preparations of edible cereals, flour, preparations Pharmaceutical products starch or milk pastrycocks products 7.13% South Korea 5.68% 26.8% 4.64% Kazakhstan Turkey Vietnam India 1.02% Germany Poland Ukraine Netherlands Finland Belgium Canada 0.69% 0.56% 0.53% Singapore Hong Kong Indonesia 0.96% Belarus 0.68% 0.5% 0.27% 0.27% 0.26% United Kingdom Slovenia Spain 0.78% France 0.5% 0.93% Malaysia 0.25% 0.24% 0.23% Australia 13.4% 6.37% 4.79% 0.85% 0.6% Plastics Rubber 21.4% 13.7% Machinery and appliances Electrical machinery and equipment Stock Aircraft, spacecraft and parts Railway and other rolling and theroot 0.96% 0.88% 0.56% and steel Iron or steel Iron and articles 2.66% Aluminium and 0.3% and articles articles thereof thereof 2.28% 1.44% Cereals 0.68% 0.32% 0.28% 0.75% and glassware 0.7% Instruments and apparatus 1.58% Furniture 1.29% Paper and paperboard; articles of paper pulp, of paper or 0.59% paperboard 1.3% 0.44% Wood and articles of wood wood c 0.63% 0.59% 1.27% 1.08% Tobacco sne Caces and manufactures preparations vintan 1.66% 0.92% Chemical products Knitted or crocheted apparel and clothing accessories 2.73% Non-knit or Textiles, made crocheted up articles apparel and accessories sets; wom clothing and wom textile articles; ag 0.92% 0.9% 0.97% 0.92% 0.85% 0.66% 0.59% 0.59 clothing Sugars and sugar esfue confectionery Oganic thewoh 0.41% 0395 0.35% articles thero 0.5% 0.46% 0.29% 0.26% Thailand 0.86% 0.66% 0.30 0.4% 0.26% Austria Denmark Incland Italy Sweden 0.4% 0.21% 0.11% 0.57% 0.16% 0.74% 0.44% 3.01% 0.85% 0.59% Czechia Hungary Brazil 0.79% 0.2% 0.15%#5Foreign Trade Between Mongolia and China#6-$1B -$800M -$600M -$400M -$200M $0 $200M $400M Total Exports Value Growth $600M $800M $1B China 21.5% Export growth: 2015-2021 China Import growth: 2015-2021 Japan South Russia Korea 19.5% 4.38% Kazakhstan Singapore Turkey Hong Kong South Korea Switzerland -68.1% Singapore 466% 410% Japan United Kingdom -45.8% Vietnam -91% United Ara Emirates -87.4% -75.5% Horg Russia Italy Germany -11.3% -15.6% France -15.4% 38.4% -$200M $0 $200M $400M $600M $800M $1B $1.2B $1.4B $1.6B $1.8B $2B -43.8% Malaysia 40.5% Thailand -26.2% 49.4% 24.3% -3096 Vietnam 23.3% 116% 187% United States India 91.9% 120% 50 $50M $100M $150M $200M $250M $300M Germany 63.5% Poland Austria Italy 33.4% 8.65% 12.1% Ukraine Belarus France -17.5% 106 % 8.17% United Sweden Kingdom 36.1% 119% 120% 22 Slovenia 27.1% Hungary 20.3% 1125 23N 119% Canada 4.67% -27.1% -47.5% Activate Windows#7Coal Briquettes 27.2% Copper Ore 27% Trade Value $6B $5B $4B $3B $2B $1B $0 Iron Ore Export 2011-2021 Gold Crude 7.23% Zinc Petroleum Ore Animal 16.5% Horse Refined Meat Copper 0.41% 1.26% Animal 0.17% 6.09% Feldspar 1.97% 2.08% Molybdenum Precious Ore 0.8% Lead Ore 0.48% Metal Ore 0.34% Tungsten Ore Hair Prepared Wool or 0.18% % Animal Hair Lignite 3.17% Knit Sweaters 0.22% 0.11% Wool 0.18% 0.45% 0.21% 0.12% Other Nuts Kapeseed 0.17% 0.31% Other Propad 0.33% 0.1% Precious metals, gems and jewelry Mineral fuels, mineral oils and products of their distillation Ores, slag and ash#8Product Space-Mongolia Product Space-China RCA>1 RCA>1 HS Code Product name 2 Meat and edible meat offal 5 Animal originated products; not elsewhere specified or included 25 Salt; Sulphur; earths, stone; plastering materials, lime and cement 26 Ores, slag and ash 27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes 41 Raw hides and skins (other than fur skins) and leather 51 Wool, fine or coarse animal hair; horsehair yarn and woven fabric 57 Carpets and other textile floor coverings 61 Apparel and clothing accessories; knitted or crocheted 71 71 Natural, cultured pearls; precious, semi-precious stones; precious metals, metals clad with precious metal, and articles thereof; imitation jewellery ; coin Conner and articles there of#9Product Code Product Label Mongolia's exports to China Value in 2021, USD thousand China's imports from world Value in 2021, USD thousand Share of Mongolia's export '26 Ores, slag and ash 3818767 254589928 1.50% '27 '51 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral ... Wool, fine or coarse animal hair; horsehair yarn and woven fabric 2142430 357721621 0.60% 205477 2949159 6.97% '08 Edible fruit and nuts; peel of citrus fruit or melons 157307 14611882 1.08% '74 Copper and articles thereof 106986 58866572 0.18% Salt; Sulphur; earths and stone; plastering '25 60459 8776772 0.69% materials, lime and cement '16 Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates 40789 354772 11.50% '02 Meat and edible meat offal 16320 29139099 0.06% Oil seeds and oleaginous fruits; miscellaneous '12 6250 54295200 0.01% grains, seeds and fruit; industrial or medicinal... '76 Aluminium and articles thereof 5878 11269641 0.05% Raw hides and skins (other than furskins) and '41 3748 3447321 0.11% leather '78 Lead and articles thereof 3203 105970 3.02% '21 Miscellaneous edible preparations 2344 4360193 0.05% Natural or cultured pearls, precious or semi- '71 1555 70965526 0.00% precious stones, precious metals, metals clad ...#10EXPORT Export to and Import from China by Sector Sector % Sector % Agriculture Chemicals 1.9 Agriculture 11.6 0.0 Chemicals 6.6 Electronics 0.1 Electronics 7.8 Etc. 8.5 Etc. 4.0 Garment 6.7 Garment 1.9 Machine 0.5 Marine 0.0 IMPORT Machine 13.2 Marine 0.1 Mine 80.4 Mine 25.4 Plastic/ Rubber 0.0 Plastic/ Rubber 3.9 Steel 1.3 Steel 8.7 Timber 0.0 Timber 3.6 Trans 0.5 Trans 13.4 Total 100.0 Total 100.0#11EXPORT Export to and Import from China by BEC Classification Classification % Classification % Etc. Etc. 0.1 25.6 Intermediate Goods Intermediate Goods 97.7 Consumption Goods IMPORT 34.8 1.6 Consumption Goods 19.3 Capital Goods Capital Goods 0.7 Total 100.0 20.4 Total 100.0#12EXPORT Export to and Import from China by Tech level Tech level % Primary Products Tech level % 80.0 Primary Products 3.3 Resource Based Manufactures 36.1 Resource Based 1.7 Manufactures Low technology 1.4 Manufactures IMPORT Low technology Manufactures 12.0 Medium technology 0.8 Medium technology 33.6 Manufactures Manufactures - High technology 0.5 High technology 10.1 manufactures manufactures Other 15.7 Other Total 100.0 4.9 Total 100.0#13EXPORT Export and Import of the Intermediate goods to and from Chinal (BEC Classification) Sector % Sector % Agriculture 1.1 Agriculture 4.1 Chemicals 0.0 Chemicals 9.6 Electronics 0.1 Electronics 8.7 Etc. 8.7 Etc. 4.9 Garment 6.1 Garment 2.0 Machine 0.3 Machine 11.0 Marine 0.0 Mine 82.2 IMPORT Marine 0.0 Mine 17.3 Plastic/ Rubber 00 0.0 Steel Plastic/ Rubber 10.5 1.3 Steel 23.1 Timber 0.0 Timber 6.6 Trans 0.2 Trans 2.2 Total 100.0 Total 100.0#14EXPORT Export and Import of the Consumption Goods to and from China (BEC Classification) Sector % Sector % Agriculture 45.9 Agriculture 52.6 Chemicals 0.2 Chemicals 16.9 Electronics 0.9 Electronics 6.3 Etc. 0.9 Etc. 4.8 Garment 49.5 Machine 0.0 Marine IMPORT Garment 6.4 Machine 3.1 0.2 Marine 0.4 Mine 0.0 Mine 0.0 Plastic/ Rubber 0.0 Plastic/ Rubber 1.4 Steel 1.4 Steel 0.8 Timber 0.8 Timber 5.4 Trans 0.2 Trans 2.1 Total 100.0 Total 100.0#15Mongolia's foreign trade and China's provinces Provinces Export Guangdong Province Beijing Shanghai Province Jiangsu husband SSSS $ 444,381,687,897 $ 55,109,544,878 $ 175,701,811,976 $ 346,709,300,509 Shandong man $ 153,131,196,676 5 Zhejiang Province Fujian husband Tianjin SSS $ 314,200,421,024 3 $ $ 107,757,744,053 6 $ 40,633,930,116 12 $ Liaoning husband $ 41,808,034,824 11 $ SSSSSSSSS 1 $ 373,355,125,888 7 $ 293,395,360,169 4 $ 287,629,938,254 2 $ 223,062,015,687 $ 133,278,952,610 106,794,954,222 Import 1 2 34 56 70,707,157,413 7 Inner Mongolia Autonomous Region ➤ 60% of Mongolia's total export ➤ 67.8% of export to China from Mongolia. 61,796,860,927 8 55,192,856,454 9 Sichuan husband 49,217,495,717 8 $ 40,287,779,442 10 Chongqing Guangxi Zhuang Autonomous Region Henan Province Anhui Province Hebei Province Shaanxi Province Heilongjiang Province Hubei Province SSSSSSSS $ 47,595,726,126 9 $ 30,061,649,325 11 $ 28,784,597,776 18 $ 29,119,850,539 12 $ 47,474,915,576 10 $ 27,985,006,129 13 Inner Mongolia Autonomous Region's import by origin $ 38,637,789,166 13 $ 27,567,409,100 14 $ 32,196,974,482 15 $ 23,358,892,567 15 50% $ 21,966,720,061 19 $ 22,779,132,512 16 $ 4,729,969,258 25 $ 21,993,928,071 17 42.2% $ 31,571,781,799 17 $ 20,690,746,100 Hunan husband $ 34,820,869,566 14 $ 17,438,692,807 Yunnan Province $ 12,349,453,809 21 $ 17,167,227,657 Jilin husband $ 4,776,369,582 24 $ 14,064,763,817 Zianxi husband $ 31,858,124,029 16 $ 14,057,555,797 Inner Mongolia Autonomous Region $ EA 5,492,711,370 23 $ 9,316,068,261 Shanxi husband $ 10,687,939,702 22 $ 8,718,273,241 Hainan Province $ 4,465,070,977 26 $ 8,345,089,054 Xinjiang Uyghur Autonomous Region $ 17,617,185,927 20 $ 5,419,576,943 122222222 18 40% 19 30.6% 20 30% Share of imports 20% 23 24 10% 25 6.7% 3.3% 26 0% Gansu Province Guizhou Province Ningxia Hui Autonomous Province Qinghai Province Tibet Autonomous Region SSSSS $ 1,536,682,141 29 $ 3,240,035,018 27 Mongolia Russia Australia United States $ 2,774,966,392 27 $ 1,773,165,344 $ 1,814,463,225 28 $ 947,996,686 $ 281,861,906 31 $ 247,202,021 $ 524,631,664 30 $ 143,134,570 31 2235 28 29 30#16Transportation Mongolia's exports: . • 26.3 percent by railway, 70.6 percent by road, 3.2 percent is by air. Mongolia's Imports: . 55.4 percent by railway, 35.8 percent by road, • 6.1 percent by air, · 2.7 percent by other transportation. China's Foreign Trade Turnover, by transportation type, 33,509,331 34,866,771 18,076,459 15,094,717 Trucks 2018-2021 300,469 169,227 849,372 2,915,911 456,507 454,517 Train 2018 2019 2020 2021 321,685 Ship 296,557 1,005,519 1,084,557 358,053 290,115 Planes#17China's import#18China's import by SITC classification 2019 2020 2021 % GROUPING 728,941,651 677,073,750 977,061,837 1. PRIMARY PRODUCTS 80,734,958 98,194,011 122,798,497 12.6% Food and live animals 7,660,251 6,213,693 7,625,468 0.8% Drinks and tobacco 285,058,554 294,483,437 428,246,544 43.8% Raw materials other than fuel 346,106,656 267,535,174 403,810,397 41.3% Minerals, fuels and lubricants 9,381,232 10,647,436 Animal and vegetable oils, fats and waxes 1,343,498,702 1,378,537,920 14,580,931 1,710,467,568 1.5% 2. MANUFACTURING PRODUCTS 218,770,329 213,331,906 264,048,747 15.4% Chemicals and related products 140,035,307 168,277,594 210,020,302 12.3% Manufactured products containing basic material characteristics 786,506,794 828,588,335 1,005,894,555 58.8% Cars and vehicles Various manufactured products 144,207,887 53,978,384 146,014,910 22,325,174 170,090,957 9.9% 60,413,006 3.5% Unclassified goods and transactions in 2,077,097,114 2,055,611,829 2,687,529,404 other parts of SITC#19Imports of some food products Units 2019 2020 2021 2021/2020 2020/2019 2021/2019 Meat (including 10 thousand 617.8 990.9 937.8 -5.4% 60.4% 51.8% organs) tons Fresh or dried fruits 10 thousand 708.8 653.9 730.9 11.8% -7.7% 3.1% and nuts tons Cereals 10 thousand 11144.6 13926.6 16453.9 18.1% 25.0% 47.6% tons Soybeans 10 thousand 8851.3 10031.5 9651.8 -3.8% 13.3% 9.0% tons Vegetable oil 10 thousand 953.3 1079 1039.2 -3.7% 13.2% 9.0% tons#20Imports of some Minerals, crude oil, oil products and gas Units 2019 2020 2021 2021/2020 2020/2019 2021/2019 Iron ore and concentrate 10 thousand tons 617.8 990.9 937.8 -5.4% 60.4% 51.8% Copper ore and 10 thousand tons 708.8 653.9 730.9 11.8% -7.7% 3.1% concentrate Coal and lignite 10 thousand tons 11144.6 13926.6 16453.9 18.1% 25.0% 47.6% Crude oil 10 thousand tons 8851.3 10031.5 9651.8 -3.8% 13.3% 9.0% Refined petroleum 10 thousand tons 953.3 1079 1039.2 -3.7% 13.2% 9.0% products Natural gas 10 thousand tons 617.8 990.9 937.8 -5.4% 60.4% 51.8%#21Imports of Products required for industry Сүүлийн 1 2020 Сүүлийн 2 Төрөл зүйл Хэмжих нэгж 2019 OH 2020 он 2021 OH Жил он/2019 он жилийн Pharmaceutical products tons 708.8 653.9 730.9 11.8% -7.7% 3.1% Fertilization Cosmetics and care products 10 thousand tons 11144.6 13926.6 16453.9 18.1% 25.0% 47.6% tons 8851.3 10031.5 9651.8 -3.8% 13.3% 9.0% Primary form plastic 10 thousand tons 953.3 1079 1039.2 -3.7% 13.2% 9.0% Natural rubber and synthetic rubber 10 thousand tons 617.8 990.9 937.8 -5.4% 60.4% 51.8% (including latex) Wood and wooden products 10,000 CBM 708.8 653.9 730.9 11.8% -7.7% 3.1% Paper pulp 10 thousand tons 11144.6 13926.6 16453.9 18.1% 25.0% 47.6% Steel products 10 thousand tons 8851.3 10031.5 9651.8 -3.8% 13.3% 9.0% Raw copper and copper products tons 953.3 1079 1039.2 -3.7% 13.2% 9.0%#22Corn (Thousands of tonnes) 350,000 300,000 250,000 200,000 150,000 100,000 50,000 Production 0 1990/91 1992/93 1994/95 1996/97 1998/99 2000/01 CHINA'S GRAIN IMPORTS RAPIDLY GROWING Corn (Thousands of tonnes) China's grain and soybean import volumes Wheat Soybeans (Thousands of tonnes) (Thousands of tonnes) Pork Chicken and beef 12,000 9,000 (Thousands of tonnes) 110,000 (Thousands of tonnes) (Thousands of tonnes) 11,000 8,000 100,000 70,000 16,000 7,200 10,000 90,000 9,000 7,000 60,000 14,000 7,000 8,000 80,000 6,000 7,000 70,000 12,000 50,000 6,800 6,000 5,000 60,000 10,000 6,600 5,000 4,000 3,000 2,000 1,000 0 السلاس 4,000 50,000 40,000 3,000 40,000 8,000 6,400 30,000 30,000 2,000 6,000 6,200 20,000 1,000 20,000 10,000 4,000 -Chicken (left) 6,000 0 0 10,000 2,000 2010 12 14 16 18 20 (Year) 2010 12 14 16 18 20 (Year) 2010 12 14 16 18 20 -Beef (right) 5,800 0 0 (Year) 5,600 2010 11 12 13 14 15 16 17 18 19 20 21 (Forecast) Corn and wheat production and consumption in China 2010 11 12 13 14 15 16 17 18 19 20 21 (Forecast) Correlation between global income and meat consumption (2018) 2002/03 2004/05 2006/07 2008/09 -Consumption 2010/11 2012/13 2014/15 2016/17 2018/19 2020/21 (Estimate) Wheat (Thousands of tonnes) 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 1990/91 Production 1992/93 1994/95 1996/97 1998/99 2000/01 2002/03 2004/05 2006/07 2006/07 Consumption 2008/09 2008/09 2010/11 2010/11 2012/13 FI/ZIOZ 2014/15 2016/17 2018/19 2020/21 (Estimate) Meat consumption per capita 140 (Kg per person/year) 120 Argentina • US ⚫Australia 100 Brazil •Spain Poland Canada Italy Vietnam 80 • Russia France • Mexico China Taiwan • Germany South Korea Netherlands Switzerland 60 Myanmar South Africa Malaysia Japan 40 Philippines Global average Turkey Morocco • Thailand Peru 20 Kenya Indonesia Nigeria 0 India 10,000 20,000 30,000 40,000 50,000 Real GDP per capita (PPP base) 60,000 70,000 80,000 (US$)#23China's grain import as share of world grain trade 16% Corn + wheat 14% ⚫Corn 12% Wheat 10% 8% %9 4% 2% %0 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 A 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 China's meat import as share of consumption 35% Beef 30% -Chicken -Pork 25% 20% 15% 10% 5% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (Estimate)#24Conclusions • Transportation and ports • Export and Import of the Intermediate goods • Export to and Import from China by Sector Export and Import of the Consumption Goods Import Technology levels • Provinces