On the occasion of the 10th anniversary of the Belt and Road Initiative (BRI), China and Mongolia signed a special loan agreement for the Erdeneburen hydropower plant construction project.

Xi Jinping: BRI to Become More Inclusive and Beneficial to All Participants

Chinese President Xi Jinping announced that he would increase the funding of the Silk Road Fund by $100 billion. This is a significant increase in investment in the BRI, which China is trying to signal that they are committed to the initiative's success.

Xi Jinping also called for greater cooperation between BRI countries on sustainable development, green cooperation, and digital cooperation. He emphasized the importance of making the BRI more inclusive and beneficial to all participants.

What is the benefit for Mongolia?

Mongolia signed a number of important agreements with China at the BRI summit, including:

• A special loan agreement for the construction of the Erdeneburen hydropower plant project.
• Memorandums of understanding to advance the Shiveehuren-Sekhee cross-border railway construction, develop tourism near the border, exchange development experiences between the two countries, and improve policy planning and strategic coordination.

These agreements are likely to have a significant impact on Mongolia's economy and development. The Erdeneburen hydropower plant project, in particular, will improve Mongolia's energy security and reduce its reliance on imported energy.

What next?

It remains to be seen how the BRI will develop in the second decade. China is facing a number of economic challenges, such as the COVID-19 pandemic and the growing debt of its real estate sector. However, China has shown a strong commitment to the BRI, and it is likely to continue to play a major role in the initiative.

For Mongolia, BRI is an opportunity to attract investment and develop its infrastructure. However, there is no guarantee that Mongolia's infrastructure development with China's loans and investments will not cause problems, starting with falling into a debt trap.