When you are a small country surrounded by two giants, it pays to be ambitious, according to Mongolian President Nambaryn Enkhbayar. Visiting Hong Kong over the weekend, Mr Enkhbayar outlined a host of active plans, from continuing efforts to improve ties with neighbouring China and Russia, offers to the new US administration to court the recalcitrant North Korea, to the hosting of a regional climate change conference. Then there were ongoing talks with local investment banks to ensure funding for the development of Mongolia's mining industry, its major source of foreign investment. 'We try to do our best to maintain good relations with both our big neighbours,' Mr Enkhbayar said of ties with Beijing and Moscow in an interview with the South China Morning Post. 'Our neighbours are very important but at the same time Mongolia should be dependent ... on what we call 'third neighbours'.' Habitual suspicions between Mongolia and its neighbours have, in part, defined the history of the barren landlocked state that sits on China's northern border. Once claimed by China and known as 'Outer Mongolia', more recent decades saw the independent modern state fall under the Soviet orbit during the cold war. Despite its vast plains, it is home to less than 4 million people, many of whom remain nomadic herdsmen. Diversifying and democratising in the wake of the collapse of the Soviet Union in 1991, Mongolia is considered diplomatically strategic, with Washington in particular keen to have influence. So, just as Mr Enkhbayar leads efforts to improve ties with Beijing, he is actively promoting links with large global players - 'the third neighbours'. He is also wary of the Shanghai Co-operation Organisation that links China and Russia with former Soviet central Asian states through security and political links. Mongolia has observer status but Mr Enkhbayar said there were no plans to deepen involvement beyond economic co-operation. He describes a burgeoning political and cultural relationship with the US and European Union, economic and aid ties with Japan and a 'spiritual' connection with India, the source of Mongolia's Buddhist faith. Beijing may have initially questioned the 'third-neighbour' approach but over time, he claims, it has come to understand Mongolia's pragmatism. 'We are thankful for China's development for assisting in Mongolia's own transition to the market economy,' he said. 'Our co-operation is growing but we need to make sure it benefits both sides. The same could be said for Russia.' Vice-President Xi Jinping visited Mongolia earlier this year and the two countries signed a medium-term plan for economic and trade co-operation. Damdin Demberel, the chairman of Mongolia's parliament, started a five-day visit to China yesterday. Specifically, Mongolia is pushing for help in developing its roads, railways and power systems, helping to open up the country for mainland investment and trade. Currently reliant on both China and Russia for much of its food and fuel, it wants to better exploit its mining and electricity industries. It sits on an estimated 2 per cent of the world's uranium and is an important source of copper and iron ore. One firm - the Mongolian Energy Corporation - is listed in Hong Kong and other mining operations are eyeing the city as a key source of capital. Mr Enkhbayar talks with considerable warmth about the burgeoning relationship with Washington. In Hong Kong as part of the Clinton Global Initiative, Mr Enkhbayar seized on the chance to send a message to the new Obama administration. Meeting former president Bill Clinton, he sent a message to his wife, incoming Secretary of State Hillary Rodham Clinton, who has visited Ulan Bator in the past. 'I have met Senator Clinton on Capitol Hill,' he said. 'She was always sympathetic to Mongolia and our cause of democratic and market development ... she always has good memories about Mongolia.' Mr Enkhbayar said his nation was 'at the disposal of the US government and new administration' to help the international effort to bring North Korea into the fold. Exploiting cold-war-era ties with Pyongyang since the 1950s, he said Mongolia could help foster the North's talks with Japan and South Korea, still considered enemy states. His offer comes as the drawn-out six-nation effort - to ensure the Stalinist hermit state lives up to international promises to denuclearise - continues to struggle. Mr Enkhbayar said it was 'difficult to say' whether North Korean leader Kim Jong-il was unwell and unable to lead on a day-to-day basis, as some reports suggest. He was still able to exchange letters with the leadership, he said. 'We hope both Mr Kim and other leaders do understand the present situation,' he said. 'It is not just for the benefit of North Korea but of other countries that they open themselves up to development.' Yet for all his diplomacy, some of his biggest tests come at home. Aged 50 and educated in Moscow and the British city of Leeds, Mr Enkhbayar faces an election to extend his four-year term next year. A former prime minister, he was a dominant political figure during tough years of early democracy. His Mongolian People's Revolutionary Party is the modernised version of the former ruling Communist Party. Legislative elections in July sparked rioting in the capital amid claims of ballot fraud and fears of corruption and inflation. 'I know there are many problems in my country, starting with poverty and corruption,' he said. His effort will be complicated by the global financial crisis, which is seeing prices of Mongolia's mineral reserves tumble. Inflation is running at close to 30 per cent but the government remains confident of posting 12 per cent economic growth next year. 'The people of Mongolia are very pragmatic,' Mr Enkhbayar said. 'They will understand that there are very pragmatic solutions.'