“We’re in discussions with several other international partners for further cooperation, including the EU and member countries such as France and Germany, as well as with Japan and South Korea.”

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Sandwiched between China and Russia, the world’s second-largest landlocked country paved its own democratic path over the past three decades after the fall of the Soviet Union, which had been a strong ally.

At 42, Oyun-Erdene is one of the younger leaders in a country where he says almost 65 per cent of the population is under the age of 40. He lived through and remembers the country’s “democratic transition”.

Geopolitically, that has put Mongolia in a precarious position. Oyun-Erdene touched on why it is a fine balancing act from a diplomatic and trade standpoint.

He said the “main principle” to employ when navigating bilateral relations is embracing a policy of mutual understanding and respect for all countries, with an eye on safeguarding peace when the world is tested by climate change, famine and poverty.

“There have been many debates concerning our relationships with Russia and China,” he said. “But we do believe that our two immediate neighbours totally understand and highly appreciate our unique geographical position.”

In terms of geopolitical tensions, Oyun-Erdene said: “The rivalry between countries because of their differences does not really impact the livelihoods of regular citizens.”

He also said “the US and China are both superpowers that have the responsibility” to be global leaders.

“Natural resources around the world are diminishing. We do have to mainly focus and cooperate on this kind of global challenge,” the leader added. “I do believe that there is an equal opportunity for both the US and China to tackle and address global challenges despite their differences and policies.”

China cosies up to Mongolia to ‘facilitate’ Russia trade, secure resources

“The two nations discussed joint responses to economic challenges, explored opportunities to deepen bilateral trade and investment, and decided to pursue cooperation in key areas, including critical minerals, clean energy and the digital economy,” the US Department of State said.

As an example of foreign cooperation, Mongolia points to an underground copper mine in its south – the Oyu Tolgoi mine in Khanbogd, South Gobi. This is a joint venture between the Mongolian government and Anglo-Australian mining giant Rio Tinto. At a ceremony on March 13, it was announced that construction on the mine had been kick-started after a long period of difficult negotiations, including over taxation.

Oyun-Erdene said that the younger generation in his country “leans more toward Western cultures”. However, a public-opinion poll conducted by the Ulaanbaatar-based Sant Maral Foundation between May and June showed that 83.8 per cent of Mongolians – out of a total of 1,200 responses – regard Russia as the “best partner” for Mongolia, followed by 36 per cent who picked China, and 17.7 per cent going for the US.

Among all respondents, 20.8 per cent of Mongolians said that Ukraine was the culprit in the Russia-Ukraine conflict, compared with 10.4 per cent pointing to Russia.

And when asked to name one country from which Mongolia would be able to get support from if faced with “a major crisis”, 46 per cent chose Russia, while China came second at 10.3 per cent.

Mongolia, which abstained on all United Nations votes regarding the condemnation of Russia’s invasion of Ukraine, has been adversely affected by the war in various respects, according to Oyun-Erdene. He said this includes shortages of diesel fuel and explosive materials used in mining; lost travel revenue; and restrictions on imports of sunflower seed oil for food.

Bill Bikales, a 30-year observer of Mongolia at the LSE IDEAS think tank with the London School of Economics and Political Science, said that “Mongolia has most definitely not cut ties with Russia after the Ukraine invasion”.

“They scrupulously abstain on all UN votes,” he added. “It is only a small minority [of Mongolians] who are ready to condemn the Russians. Having a counterweight to Chinese influence is too important.”

Oyun-Erdene described China as his country’s “largest trading partner”. Around 95 per cent of Mongolian exports are transported to China, as the country has no ports from which to ship goods.

China accounted for 64.3 per cent of all Mongolian trade last year, or US$13.7 billion worth of it, according to Mongolian media News.mn. Hard coal and copper concentrates respectively accounted for 56.8 per cent and 25.9 per cent of Mongolia’s exports to China.

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Although disagreements and other hurdles between Mongolia and China have affected discussions about building “border connecting points” between the two countries, Oyun-Erdene noted that Mongolia opened a third railway connected with China in November.

“In the future, we’ll have great relationships with China, we’ll increase our trade and economic partnership,” the prime minister added. “The Chinese government does not interfere in our domestic affairs, and it respects our development path and the government structure that the people of Mongolia have chosen.”

The International Monetary Fund (IMF) said in October that Mongolia needed to ensure greater exchange rate flexibility, strengthen international reserves and facilitate large external debt rollover this year, News.mn reported after the IMF conducted its annual look into the economic, financial and exchange rate policies of its member.