China and Mongolia: The Limits of Sheep and Tea Diplomacy

This article assesses Chinese and Mongolian relations following the withdrawal of the Soviet troops. Starting from the 'normalisation' of relations in 1989, the study follows three different phases in the development of the bilateral relationship: inception, acceleration, and ambiguity. Currently, the impending transformation of global foreign policy dynamics places Mongolia at a crossroads, potentially pushing it into a precarious geopolitical 'grey zone'. In particular, the uncertainty disrupted the relative stability that Mongolia has maintained under its 'ambiguous' foreign policy, which involved avoiding alignment with either of its neighbours and broadening its foreign relations. Using the logic of two-level politics by Putnam (1988) for the analyses, the study examines the constraints and pressures that foreign policy executives face, and assesses the most likely areas for cooperation among the economic, political, security, and societal sectors. The findings draw on data from multiple sources and show that, in general, Mongolia's economic dependence is at the core of bilateral relations. However, the findings also show that even if Mongolia is often depicted as a hostage of great power politics, there is a lot of omni-balancing between internal and external pressures. In the end, suggesting more political nuance than can be expected.