E-commerce and tourism in China and Mongolia are creating a buzz in the tiny town in the Gobi Desert

ULAANBAATAR, Mongolia (SCMP): With steady demand for cashmere, bags, shoes and even camel wool, trade between China and Mongolia is booming through a bustling border town amid strong e-commerce orders.

In addition to Mongolia’s strategy to diversify its economy to boost growth after the coronavirus pandemic, the landlocked country is also enjoying a surge in tourism from its neighbor.

Round-trip trips on the Erenhot Highway and through railway ports increased 95 percent year-on-year to 1.75 million this year through Sept. 5, according to the information office of the regional committee in China’s northern Inner Mongolia Autonomous Region.

During the same period, 442,000 vehicles passed through the same ports of entry, twice as many as during the same period in 2023.

Erenhot is a county-level city located in the Gobi Desert along China’s extensive border with Mongolia, which has been particularly prosperous since April, after a trial opening of a 24-hour border crossing for goods as part of an effort to reduce truck congestion at the port, which is its largest land link on the Sino-Mongolian border.

“In terms of distance, Mongolia and China are very close. Regardless of the purpose, this is the biggest advantage,” said Sumiya Chuluunbaatar, assistant professor at the Institute of International Studies of the Mongolian Academy of Sciences.

“China’s infrastructure is still relatively new and excellent, and the affordable service industry continues to attract not only Mongolians but also more foreigners.”

According to Chinese customs data, Mongolia’s exports to China increased by 10.6 percent in the first seven months of the year compared with the previous year and amounted to $8.138 billion.

Shipments from China to Mongolia also increased by 48.5 percent to $2.647 billion during the same period.

“As far as I know, the scale of the border economy is modest and focuses on border trade and services for truck drivers, traders and tourists,” said Xu Tianchen, senior economist at research firm Economist Intelligence Unit.

In turn, Mongolian member of parliament Batshugar Enkhbayar insisted that the 24-hour border crossing would be permanent and would end at the end of September, although he said that talks had not yet taken place.

“The Mongolian side is expanding due to mining projects in the Gobi region, and we are making sure the crossing is more efficient,” Enkhbayar said.

Enkhbayar added that this year, as of mid-September, about 108,000 tourists had arrived from China who saw Erenhot as a way to get to Mongolia by train to experience its “nomadic culture” and “remote,” accounting for 21 percent of all arrivals from abroad .

Xu added that tourist arrivals from China to Mongolia increased by about 75 percent in the first half of the year, with Erenhot being the largest border crossing.

Last year, Mongolia’s gross domestic product increased by 7%. compared to the previous year, and the share of consumption was 6.1%, compared to 6.5%. in 2022

And despite venturing into the Mongolian market less than a year ago, Hangzhou Intelmind E-commerce CEO Wei Peiran has witnessed “remarkable” month-on-month growth thanks to its “diversified product range, effective pricing strategy and solid logistics system.”

Wei said he used Alibaba’s 1688 B2B platform to tap the Mongolian market.

Alibaba owns the South China Morning Post.

“Our approach focuses on sourcing goods directly from Chinese suppliers, digitally streamlining logistics and delivering goods at the lowest possible cost,” he said.

“Mongolia is a strong market with a young population and advanced technological infrastructure, including reliable internet access and payment systems.”

Chuluunbaatar of the Mongolian Academy of Sciences added that digital transformation would help attract foreign companies because “registering a new company in Mongolia no longer requires paper documents.”

Wei is also eyeing an even larger market in Mongolia, working with Central Asian countries including Uzbekistan to expand its reach.

“With a population of over 35 million and an annual increase of approximately 1 million, Uzbekistan’s rapid economic development highlights the significant sales potential of Chinese products,” he added.

A UN e-Government study published in September showed that Mongolia has risen 28 places from 2022 to 46th out of 193 member states in the e-Government Index and 20 places to 50th in the E-Participation Index since 2020.

“The results of the latest UN e-Government study show the significant progress Mongolia has made over the past two years in digitizing our economy… and making it easier for citizens to connect with the government,” Chief Cabinet Secretary Uchral Nyam-Osor said in an official statement. – MORNING MAIL IN SOUTHERN CHINA