China’s challenge to the United States has, at last, led American officials to change the way they view the PRC. Addressing the Hudson Institute at its New York gala in October, Secretary of State Mike Pompeo rejected decades of U.S. policy that “accommodated and encouraged China’s rise . . . even when that rise was at the expense of American values, Western democracy, and security, and good common sense.” For their part, Chinese leaders took advantage of that approach, avoiding confrontation with Washington while building up economic and military power.
Now, however, China’s ambitions are on full display, particularly around its borders where, according to the Pentagon, it is engaged in “military modernization, influence operations, and predatory economics to coerce neighboring countries to reorder the Indo-Pacific region to their advantage.”
Mongolia is on the front line. The most sparsely populated sovereign state in the world, it shares China’s longest border. (Its only other border is with Russia.) Mongolia receives little attention in the United States, overshadowed by America’s longstanding alliances with Japan and South Korea. But ever since America’s relationship with Mongolia began in the late 1980s, the United States has stressed the importance of Mongolia’s sovereignty and democracy to a free and open world order. Today, its democracy, Tibetan Buddhism, and history under the Qing empire, not to mention its proximity and vast natural resources, make it an inexorable target of the PRC’s agenda to restore its dominance in Asia and challenge American leadership in the region. As the competition between the PRC and the United States in Asia plays out in Mongolia over the coming years, America’s other partners and allies will draw lessons from how Mongolia fares, and what Washington does.
It is often said that the Mongols have ruled and been ruled by China. The reality is more complicated. China was part of the Mongol empire from 1271-1368. Later both Inner and Outer Mongolia came under the Manchu Qing dynasty, the non-Han dynasty that ruled China from 1644 to its collapse in 1911. Sovereign, democratic Mongolia is the former “Outer Mongolia” north of the Gobi Desert. (The distinction between Inner and Outer Mongolia, writes Morris Rossabi, “was due partly to the different times the Qing brought them under its control and partly due to the Gobi Desert separating the two.”) When the Qing dynasty collapsed in 1911, Outer Mongolia declared independence under a theocratic government led by the patriarch of the Mongolia’s branch of Tibetan Buddhism, a reincarnate lama known as the Bogd Khan. The Mongols had adopted Buddhism, specifically the Gelug school of the Dalai Lamas, from Tibet in the 16th century, establishing close bonds that continue to this day, much to Beijing’s displeasure. After a tumultuous decade, a communist faction took control, and the country fell under Soviet sway for nearly seven decades.
Despite Soviet domination, Chinese leaders continued to claim Mongolia. Chiang Kai-shek was persuaded to relinquish his claim by President Roosevelt, who used it as an inducement to Stalin to enter the war against Japan. After the communist victory in 1949, and especially after Stalin’s death, Mao continued to press Chinese claims with the Soviets. Toward Mongolia’s leaders, Mao took a different tack, according to documents translated and analyzed by the historian Sergey Radchenko. In 1956, purporting to be “ashamed” of the paltriness of Chinese aid to Mongolia, Mao framed offers of assistance as compensation for Qing exploitation of Mongolians and other minorities. In this respect, writes Sergey Radchenko, “Mongolia was hardly different in Mao’s view from the peoples of Tibet and Xinjiang.” Of course, by then the PRC had already invaded and occupied these two former imperial regions. Today they are the subject of intense repression under communist rule, and serve as laboratories for perfecting methods of surveillance and control. Chinese leaders no longer speak of acquiring Mongolia’s territory. They do, however, appear determined to achieve their objectives through other, primarily economic means.
America’s relationship with Mongolia was forged as it emerged from Soviet domination. Gorbachev had loosened control, withdrawn troops, and mended ties with the PRC, beginning in 1987. In 1990, a youthful democracy movement staged protests and hunger strikes in Ulaanbaatar’s central square, leading to multiparty elections. Visiting Mongolia in 1991, Secretary of State James A. Baker described the country as “at the crossroads of a new order for Asia and the world—an order based on democratic values and free markets.” By then, autocracies had given way to democratic transitions in South Korea and the Philippines, and later in Taiwan and Indonesia. U.S. officials expected that the wave of democracy then spreading through Asia would continue. They based their approach to China on the belief that engagement, trade, and investment would lead Chinese leaders to integrate the PRC country into the U.S.-led world order.
Baker coined the phrase that has defined U.S.-Mongolia relations ever since, calling America Mongolia’s “third neighbor.” The phrase conveyed America’s desire to compensate for Mongolia’s difficult geographic position—landlocked between China and Russia. Mongolians embraced the “third neighbor” concept, making it a guiding principle of a foreign policy that seeks close ties with other democracies in Asia and Europe and membership in multilateral bodies led by them. In particular, Mongolia has distinguished itself as a NATO partner, sending its armed forces to participate in NATO missions in Iraq and Afghanistan.
Although America’s approach to Mongolia has remained constant, if also a bit neglectful, the geopolitical situation in the region has not. China, with the economic and military power it has amassed over decades, is shaping its periphery, projecting influence around its borders as part of its effort to dislodge the United States. Today, the PRC carries out development, cooptation, and coercion strategies to advance interests such as subversion of Tibetan Buddhism, regional influence in Nepal, and access to the Indian Ocean in Burma. The PRC’s Central Asian neighbors formed the nucleus of the Shanghai Cooperation Organization (SCO), whose mission, initially defensive, was to shore up security and serve as a kind of dictators’ support group to rebuff Western criticism. However, more recently it has become influential, writes Thomas D. Ambrosio, to achieve a “‘democratic’ international system in which no one political standard or perspective dominates.” This notion is at the core of Xi’s presentation of the PRC’s political model as a “new option for other countries and nations who want to speed up their development while preserving their independence” outside of global democratic norms and immune to Western censure. A successful democracy on its longest border constitutes a threat. “Even as it grows stronger and, in certain respects, more self-confident,” Aaron Friedberg writes, “the Communist Party continues to dread ideological contamination. . . . Pliant, like-minded states along its borders are far more likely to help Beijing deal with this danger than flourishing liberal democracies with strong ties to the West.”
In one sense, Mongolia might seem well equipped to withstand pressure on its political system from its neighbor. Democracy has become part of Mongolian national identity. According to the Bertelsmann Foundation, “public opinion surveys confirm that 85-90 percent of Mongolians regard democracy as the best form of government.” However, pervasive corruption has created political instability and is chipping away at public confidence in political institutions. Elective office is seen as a vehicle to achieve wealth, rather than a public trust. Citizens have coined a pun on the Mongol word for fog, manan, from the initials of the two leading political parties, to express the perception that a cross-party clique operates to benefit politicians rather than the public. The institutions charged with checking and preventing corruption are viewed as corrupt themselves. In 2018, the Bertelsmann Foundation noted the popular perception that the anti-corruption agency “has become a tool for political retribution and is largely controlled by political interests who do not themselves want to face corruption charges.”
Mongolia’s economic dependence on China complicates its situation even further. More than 85 percent of Mongolia’s exports, mostly commodities, go to China. Dependent on natural resources, Mongolia is vulnerable to cycles of boom and bust. In 2011, Mongolia had the world’s fastest-growing economy. By 2017, the global economic downturn, the decline in demand for commodities, and irresponsible fiscal policies forced Mongolia to seek a bailout from the International Monetary Fund (IMF), but that too carries a risk. A Chinese-funded 2.2 billion “swap line”—effectively a currency loan—constitutes an unusually large part of the $5.5 billion IMF Mongolia rescue package. Beijing, writes Daniel McDowell, can “broker liquidity” or deny it to achieve particular objectives in a debtor country, including, especially, undermining U.S. influence. That swap line expires in 2020, raising concerns about what costs Beijing might exact to extend it. Meanwhile, Mongolia has been identified by the Center for Global Development as one of eight countries participating in the PRC’s ambitious Belt and Road Initiative (BRI) that is at “particular risk of debt distress.”
Elsewhere, the nexus between debt and Beijing’s geostrategic objectives has become clear. For example, Sri Lanka was forced to enter into a long-term lease with a PRC state-owned port management company when it was unable to make payments on a loan for the Hambantota port negotiated with a PRC state-owned bank. This development not only jeopardizes Sri Lanka’s sovereignty, but also threatens freedom of navigation in nearby sea lanes. In Malaysia, which offers access to both the Indian Ocean and South China Sea, China reportedly offered to rescue the scandal-ridden 1MDB sovereign wealth fund in exchange for Chinese stakes in railway and pipeline projects.
Beijing complements its economic influence in Mongolia with information and propaganda efforts: television and radio broadcasts, three Confucius Institutes, and a cultural center. The number of Chinese-language teachers in Mongolia now exceeds the number of volunteers for the Peace Corps, which has operated in Mongolia since 1991. Particularly effective, according to AidData, a research lab of William and Mary, is China’s prowess at “elite to elite” diplomacy that creates “sympathy for and alignment” with China’s “policies, priorities, and values.”
A cause-and-effect relationship is difficult to prove, but a perceptible shift toward China took place under the presidential administration of Tsakhia Elbegdorj, who left office in 2017. According to Jeffrey Reeves, Elbegdorj entered into agreements with Beijing that indicated a willingness to accept “far greater Chinese involvement in the Mongolian economy than in the past.” In the realm of foreign relations and security, Reeves notes that there is now “greater political integration . . . [and] unprecedented levels of cooperation between Mongolia and China’s elite,” including, for the first time, joint military exercises and “deeper ties with China’s PLA for communication, strategic trust, and training purposes.”
Landlocked Mongolia does not offer access to sea lanes. Nor does it offer a particularly desirable overland route to Europe. Nonetheless, Mongolia is strategically important to Beijing as a place where its quest to recover imperial domains and its quest to acquire influence over Tibetan Buddhism, and especially reincarnation, converge. Under the Qing dynasty, Emperors relied on Mongolia’s ecclesiastical rulers to maintain order. As Qing rule created unrest, the patriarch became associated with the difficulties Qing rulers faced in maintaining the empire. In an effort to diminish the power of the clergy, the Emperor created a ritual to interpose himself in the process of identifying reincarnations in both Tibet and Mongolia. Acting on his behalf, imperial representatives drew lots from an urn designated for the purpose. This ritual was also conducted for the Dalai Lama. “The use of urns for divination rituals was not new to Tibetans,” write Michael Van Walt and Miek Boltjes, “but the role of the Manchu Emperor in the selection of the Dalai Lama was.” Indeed, Tibetans did not accept the ritual, and the current Dalai Lama, the 14th, has rejected it.
In 1995, to associate itself with the imperial past and lay the groundwork for its selection of an impostor Dalai Lama, Beijing revived the urn ritual to install an impostor as the Panchen Lama, the second-most prominent figure in Tibetan Buddhism. That impostor, rejected by Tibetans as “the Chinese” or “fake” Panchen Lama, now a young man, is being groomed to play a larger role in the Party’s Tibetan Buddhist agenda. In May 2019, he made his first trip abroad, to Thailand. (The whereabouts of the authentic Panchen Lama are unknown.)
Beijing actively cultivates Buddhists in China’s periphery, rebuilding and appropriating historic Buddhist sites, and coopting monks in order to sever bonds of loyalty to the Dalai Lama. In Mongolia, it has gone even further. When Ulaanbaatar welcomed the Dalai Lama for a visit in 2016—despite China’s warnings—Beijing shut down border trade at great cost to the Mongolian economy. While in Ulaanbaatar, the Dalia Lama is said to have acknowledged the reincarnation of the Tenth Patriarch, head of Mongolia’s branch of Tibetan Buddhism—an exercise of the spiritual authority that infuriated Beijing. To ease the economic pressure, Mongolia’s Foreign Minister pledged that “under this current government, the Dalai Lama will not be invited to Mongolia, even for religious reasons,” and repeated Beijing’s position that Tibet is an inseparable part of China. It was an unmistakable signal to other governments about how far Beijing might go to achieve their acquiescence on the matter of the Dalai Lama’s reincarnation.
Some have wondered whether the rhetorically pleasing Third Neighbor policy might prove to be anachronistic, well-intended but unsustainable in a dramatically different geopolitical situation. It seems that the Trump Administration is determined to prove otherwise. In July 2019, Mongolian President Khaltmaa Battulga called on President Donald J. Trump in the White House. Most media coverage emphasized Battulga’s background as a wrestling champion, and his traditional gift of a horse. However, the visit capped a year of accelerating pace of diplomacy and culminated in a strategic partnership.
America recognized Mongolia’s importance when the spread of freedom and democracy in Asia seemed assured. Mongolia is even more important now that they are not. Mongolia’s national identity, rooted in its religion, history, and democracy, makes it a target of Beijing’s regional power projection. Mongolia’s survival as a democratic, sovereign nation, long an objective of American policy toward Asia, now constitutes a vital element of America’s revised policy toward China.