Mongolia and China's northern region have witnessed a rapid spike in GDP growth due to an increase in coal mining operations. This research brief is the first installment of a China Environment Forum examination of the sustainability of such coal mining in light of growing water-energy confrontation in Mongolia.
China鈥檚 economic boom appears to be contagious. Over the past few years, China鈥檚 northern neighbor has quietly caught the bug and become the world鈥檚 second-fastest growing economy, experiencing a GDP growth rate of approximately in 2011.
Mongolia鈥檚 swift economic rise is driven by the , which now accounts for approximately of the country鈥檚 GDP growth. The National University of Mongolia estimates that mining will in the next decade. Coal output alone is expected to grow by 2015 鈥 evidence of the government鈥檚 willingness to tap this vital resource for domestic use and exports. The Mongolian government estimates that the opening of large mines to commercial operations will push the country鈥檚 GDP growth to in 2013.
Foreign investors, particularly Chinese companies, are vying for 鈥淢inegolia鈥檚鈥 resources. While this investment in the expanding coal, gold, and copper industries offers the promise of improving the livelihoods of the Mongolian people 鈥 the country has a poverty rate of 鈥 dependence on mineral exports also subjects the country to economic vulnerability due to commodity prices鈥 high volatility. Mining is also creating serious environmental problems for this dry grassland country 鈥 not only polluting water and soil, but threatening the country鈥檚 limited water resources with overuse. Coal mining in particular is driving a critical water-energy confrontation that mirrors challenges facing China鈥檚 dry and coal-rich north.
This research brief is the first installment of a China Environment Forum examination of the growing water-energy confrontation in Mongolia linked to foreign direct investment, particularly from China. The dilemma facing Mongolia鈥檚 policymakers is how to balance economic development and environmental sustainability with an expanding conflict over water allocation between people and industry. Our second installment will focus more on the economics and governance of water usage in Mongolia鈥檚 mining sector.
Download the full brief from the 星空传媒 Center.
Sources: CIA, The Economist, Economy Watch, NPR, World Bank, Xinhua.
China鈥檚 global footprint isn鈥檛 just an economic one, it鈥檚 an environmental one. From BRI investments in Africa and Asia to its growing presence in Latin America, understanding China鈥檚 motivations, who stands to gain - and who stands to lose - is critical to informing smart US foreign policy. Read more
