China continues to erode Russia’s economic influence, where it is profitable to fill the gap. At the same time, Beijing faces rising tensions with European partners.
Mongolia plans to boost coal exports to China by almost 20%. Russia once dominated this market, but Beijing has now replaced it.
Meanwhile, French President Emmanuel Macron warns that the EU may impose tariffs due to trade imbalance.
According to Bloomberg, China has reached a trade surplus above $1 trillion for the first time.
Mongolia’s opportunity window
Located between China and Russia, Mongolia has always tried to balance between two neighbors. After the collapse of the USSR, Russia stayed an important partner for Mongolia. Energy, logistics, shared infrastructure, and historical ties shaped this relationship. Moscow also wrote off a large part of Mongolia’s Soviet-era debt in a gesture of goodwill. Yet today, China is a far stronger economic player.
More than 90% of Mongolian exports now go to China. In 2022, this share was 64%, as the Foreign Intelligence Service of Ukraine noted. Mongolia is moving closer to Beijing because of economic dependence and geopolitical realities. China is Mongolia’s largest trading partner and investor. Chinese companies are pushing Russian companies out of key markets as it had to start the investment pause.
Mongolia remains because of its historical experience with China. In practice, however, the country is already far more dependent on Beijing than on Moscow. China and Mongolia are launching new infrastructure and logistics projects. They have agreed to build a new railway line between Hasu-Sukhait and Ganchi-Modu.
Important to remind that Mongolia did not arrest Vladimir Putin during his visit in September 2024, despite the International Criminal Court (ICC) warrant and the signing of the Rome Statute, citing its energy dependence on Russia.
China and France
Macron said the EU may need to take “decisive measures,” including tariffs, if China does not address the growing trade imbalance. The relationship has become one-sided. China imports very little from the EU. The EU’s trade deficit with China has grown by almost 60% since 2019.
China also helps Russia bypass Western sanctions. A Russian liquefied natural gas facility delivered its first shipment to China after U.S. sanctions in January, Bloomberg reports.
Conclusion
China’s foreign policy is driven by profit. Beijing supports Russia when it is beneficial. It also moves into areas where a weakened Russia leaves openings, such as Mongolia.
The EU has become dependent on the Chinese market. Yet, China also needs Europe. As EU security concerns grow, confrontation may increase. The profits are already significant and continue to rise, so major economies are going to take measures to stabilize the situation.
