Tess Vigeland: Quiz show time: Which country had the fastest-growing economy last year? We can pretty much eliminate the one we live in. Europe doesn’t have many eligible contestants. And so the answer is… Mongolia!
Didn’t see that one coming, did you? Genghis Khan and yurts come to mind. But Mongolia is also home to one of the world’s largest untapped deposits of coal. And that has not escaped the notice of its neighbor, China. Our China correspondent Rob Schmitz reports.
Rob Schmitz: Mongolia’s recent discovery of a treasure trove of coal is sort of like discovering oil in your backyard. Your neighbors will soon come snooping around.
Terrence Edwards of the Business Council of Mongolia says that can make you nervous.
Terrence Edwards: It’s a very small remote population in a very large country, and they’re very protective of their culture and their people and their resources.
Today, the Mongolian Parliament will consider legislation to bar foreign state-owned companies from controlling Mongolia’s resources. The bill is aimed at Chalco, a Chinese state-owned enterprise that has bought a controlling stake of one of the country’s big coal mines.
Dale Choi, Mongolian investment strategist for Frontier Securities, says this deal scares Mongolian politicians.
Dale Choi: They don’t want Chalco to be the buyer, the seller, and the producer at the same time.
Choi thinks the bill might deter foreign investors, but by singling out Chinese firms it might attract competing U.S. investors. Next month, Mongolia will hold national elections. Terrence Edwards says many Mongolians are pushing politicians to take a stand against their Southern neighbor, which is having an increasing influence on Mongolia’s economy.
Edwards: China has 50.99 of all foreign investment into the country. And then you look at the next one, No. 2, that’s Canada. And they have 8 percent, and that’s a huge difference.
Edwards says Mongolians are conflicted about China: Without China, Mongolia loses 80 percent of its import and export trade. But with China comes Chinese influence and control over Mongolia’s precious national resources.
In Shanghai, I’m Rob Schmitz for Marketplace.
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