Chinese Direct Investment In Mongolian Mining Sector And Its Impacts On Mongolian Development

【Abstract】Since the trade has increased year， and trade volume increased year by year. In bilateral trade in Inner Mongolia， Mongolia has become a major trading partner， This paper reviewed the literature analysis， and then， through the analysis of various countries trade with Mongolia's mineral and the status quo， SWOT， PEST， and return to China's direct investment in the Mongolian mining industry is analyzed， and the effects on Mongolia， finally according to the results， has carried on the comprehensive analysis.

【Key words】China；Mongolia；Investment；Development

1.Introduction

Mongolia is rich in mineral resources and mineral resources development potential is very large. The rapid development of economy and society in the world，the demand for mineral resources constantly growing， Mongolia have been introduced under the background of this great development of mineral resources，stimulating economic development in a number of policies and regulations to mining investment environment has been greatly improved by a relatively stable political situation in Mongolia.Therefore，the developmentofMongolia's mineral resources cooperation，but also to make up for some of theserious shortage of mineral resources in China， and also to be able to invest a lot of money and our technical staff，is conducive to China'sinfrastructure improvements and an increase in employment，so that the continuous integration of the two markets，next to the friendly relations between Mongolia and China has an important strategic and practical significance.

2.Review of the Literature

Mongolian Academy of International Institute issued a \"China Today \" magazine，describes China 's politics， economy，history and culture of Mongolia-China relations after the Cold War have done a lot of useful discussion. Mongolian scholar Bathayar in \" Mongolia and China：a new partnership\"（2003），a book to study the factors Mongolian relations.He believes that religion relations between Taiwan and Mongolia and Western countries there is a Mongolian mineral energy cooperation with Mongolia-China relations：realities and future given impact. In terms of international trade in the form of Mongolia in order to trade in the form of export-led resources，the biggest drawbacks is the Mongolian economy would place undue reliance on the export of its resources .

Jing-yu li，Ray young（2012）toMongoliamineral resources distribution， development situation and theadvantages and disadvantages and Mongolia in the cooperative development factors analysis，intensify cooperation development countermeasures are put forward，and argues that China and Mongolia mineral resource cooperation development prospects， is bound to the lasting development of bilateral economic and trade cooperation provided strong impetus.Hu Wen（2011）summarizes the Mongolia somescholarspointofview，andthinkof Mongoliatoachieveeconomic development goals，in fact，more is to rely on China's investment.But at present there are many in cooperation on investment in the problem to be solved.

3.Hypotheses

China and Mongolia cooperation in mineral resources.

China has become Mongolia's largest trading partner and a major investment in the country.Chinese direct investment in Mongolia will increase each year.Since 1990，China's total investment reached2.6 billion to Mongolia Dollars，and in the last 10 years， China is top of the list of investors in Mongolia.By the end of 2008， more than 4，595 Chinese entities registered，with a total investment amounted to $1.6 billion.Over the past four years，China's investment growth of3.7times， 4-fold increase in the number of entities.67.3%of China's total investment for the mining sector.

Figure1 1990-2010， the cumulative foreign direct investment in Mongolia internal scale drawing.

Figure2 in 2011，Mongolia's export structure of China's

Most of the investment in the mining industry in Mongolia funded enterprises from the surrounding provinces of Inner Mongolia，Hebei， Heilongjiang，Xinjiang，Shandong and Gansu，a few companies from Jiangxi， Henan and Fujian provinces in mainland China or southeast coast. Chinese enterprises are mainly interested in minerals to China's gold， lead，zinc，iron ore，coal and oil.However，due to the hardware infrastructure facilities Mongolia foreign companies who cannot meet the requirements， so most of the current invest in Mongolia funded enterprises are in the preparation stage，the official start but to start is not much.So，we can obtain the hypotheses that the investment environment will play an important role in Chinese direct investment in Mongolia.

4.Methods and Analysis

4.1 SWOT analysis

4.1.1 China's mining the advantage of direct investment in Mongolia analysis （S）

（1）The enterprise capital and financing advantages.

（2）the cost advantage.

（3）technical advantages.

4.1.2 Chinese mining disadvantage analysis of direct investment in Mongolia（W）

（1）Enterprise blindly following investment，which lacks of risk assessment and prevention mechanisms.（2）The direct investment of mining the disorderly competition between enterprises China's\"going out\" of the enterprise， the scale range，different nature，also is not the same position in the industry chain.（3）Lacking of Chinese companies which can \"going out\".

4.1.3 Chinese direct investmentin Mongolia the mining opportunities analysis（O）

（1）The government policy support. State shall encourage and support a variety of ownership enterprises have comparative advantages to develop mineral resources overseas exploration and development activities to encourage strengthen investment cooperation with other countries and regions.（2）Affected bythefinancial crisis，the international mining company market value. The market capitalisation of the global financial crisis has made many listedcompanies，mining rights value generally shrink，fell by nearly 50% on average.

4.1.4 Chinesemining threat analysis of direct investment in Mongolia（T）

（1）Mongolia investment service system not perfect.At present China's lack of a system， perfect the service system of overseas investment， including mineral resources information service system， financing system， foreign policy and policy support system，etc.（2）The influence of the China threat theory\".As China's international economic status has become increasingly significant， the argument of \"China threat\" appeared on the international.

4.2 PEST analysis

4.2.1 Political factors analysis

Since 1990， Mongolia is to implement encourage foreign investment policies. Mongolian parliament was first formulated and issued in 1991 the foreign investment law，and in1993，1998and 1993，to a certain change， make foreign investment environment has been further improved. Get the Mongolian constitution of foreign investment and foreign investment law and other laws and regulations and Mongolia to join the international convention for the protection of.Make the current Mongolia has a good legal environment of foreign investment.

4.2.2 Economic factors analysis

Investmentgrowthin2011oftheindustry，such as geological prospecting，mining，petroleum，growth occupies for46%，trade，service industry growth 13.%，light industrialindustrygrows8.3%，cattleclassrawmaterials processing industry grows5%，construction， building materials production industry grows5%，Banks，financial industry increasedby3.1%，19.6%growth in other industries.

4.2.3 Social factors analysis

Mongolian folk honest，friendlyand hospitable，the bilateral relations of good-neighborly friendship with Chinaprovides guarantee for bilateral cooperation.Withthe strengtheningofgood-neighborlyandfriendly relations，high-level visits between the two countries continuously and signed a series of documents， for relations between the two countries the healthy and stable development laid a solid political and legal basis.

4.2.4 Technological factors analysis

World bank data shows that slower Mongolia science and technology innovation and development，technology innovation development level is lower than other countries.The privatisation of state-owned industry affectstheuniversity-RD cooperation between enterprises，in recent years， between them began to explore new forms of joint research programs such as RDcooperation.Government-funded RD is the key to technology development，Mongolia majorityof RDproject funded by the government， but very few research application and transfer.

Matrix A is called factor loading matrix.In loading factor A， the sum of squares of elements in the j-th column，which can be seemed as the contribution of factor X in F.In other words，it means the sum of variance contribution rate from same common factor Fj to the other variance， and it is an indicator in measuring the relative importance of the common factors.

4.4 Regression and Results

Table1 indicator variable phase relationship

Table2 total variance

5.Discussions

Mongolia possesses world-class mineral wealth， which will play a critical role in the country's development. The Government is creating an environment for open， transparent and fair developmentI think Mongolian Government is actively driving economic development by money came from mining sector. Improving transparency and governance standards to professionalize management structure and improve oversight. Creating a supportive fiscal and regulatory environment that provides stability and confidence for local and foreign investors. Increasing the support from the international investment community and attract capital and know-how. [科]

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