China’s investment in Mongolia is clearly enormous due to Mongolia’s abundant resources. From the need of 30-40 billion US dollars to finance Mongolian developments emphasized by many sources, the main question is how much will come from China and what form it will take? Historically Mongolian trade and investment have been developed with Russia and China, however for last 10-15 years China and Mongolia have rapidly developed economic and trade cooperation.
By statistics from the Mongolian side, up to the end of 2002, there were 825 enterprises with Chinese investment in Mongolia. With its investment exceeding US$ 281 million, China has remained Mongolia's biggest investor, reaching some 40% of Mongolia's total foreign investment in June 2002. There are many points where China and Mongolia can both make beneficial investment especially in mining sector.
From long term forecasting we can see that, growth in emerging markets will support recovery in global metal consumption and dependency to China must be increased, particularly for exports and FDI. On supply side, copper mine production is increasing very slowly in China, although raising concentrate import requirements has become very high levels already, as well as copper prices have increased rapidly over the last decade, following strong demand-growth.
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- Issues which Chinese investors will have to face
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