Mr. Chairman,

Minister Zorigt,

Distinguished participants:

A very good morning!

I am glad to be invited to attend the Second International Coal Investors Conference. Let me begin by extending my warmest congratulations to the organizers on the opening of this important meeting held at a crucial juncture.

There is no doubt that the Mongolian economy is booming. Driven by the strength of its mining sector, Mongolia emerged last year as a global leader in economic growth, having gained an eye-catching 17.3%. And if all goes well, the mid-to-long-term prospects for Mongolia will remain robust for the foreseeable future. As a close neighbor, China is proud to have contributed to, and gratified to have benefitted from this remarkable growth. As two of the fastest-growing economies, China and Mongolia furnish opportunities for better and faster growth and development for each other and are well-placed either literally or literarily to work and thrive together.

Let me talk briefly about the economic situation in China and its implications.

As for everyone else, 2011 proved to be no easy year for the Chinese economy. The complications in the global economic landscape did take their toll on China in more ways than one. The Chinese Government responded by adopting a proactive fiscal policy and prudent monetary policy, by strengthening and improving macroeconomic regulation, and by deepening structural reform. Thanks to these measures, we managed to make progress in rebalancing the economy towards more endogenous growth and greater equity and sustainability as well as maintaining reasonably steady and strong growth. Preliminary estimates show that the GDP of China reached 47.2 thousand billion RMB in 2011, up by 9.2% at constant prices on the previous year.

The world economic outlook for 2012 will continue to be threatened by uncertainties and fragilities. According to the IMF, "financial conditions have deteriorated, growth prospects have dimmed, and downside risks have escalated." With growing interconnectedness vis-a-vis the rest of the world, China will not remain unaffected. A worsening external environment and weakening domestic demand will give rise to new risks and at the same time, amplify existing ones in the economy at both the macro and the micro levels. It will also result in economic growth almost inevitably slowing down slightly to about 8.5%. Please note that although by our own standard if you look at the history of the country's growth trajectory over the past 30 or so years, this is rather slow growth, it is still quite a feat, particularly for an economy the size of China.

A China continuing on its growth path is a stabilizer, if not yet an outright anchor for the regional and world economy. For even if the current import propensity holds steady, 2012 will see the Chinese economy draw in about US$ 1900 billion worth of import. The figure will likely be heftier if the trend towards more consumption-driven growth maintains its present momentum. Besides, a growing Chinese economy will continue to serve as both a magnate for incoming FDI and a generator of sizable overseas investment, which stood at about US$ 60 billion as of the end of last year. More significantly, however, there is no question of China seeking to grow in isolation or at the expense of others. What we are after is win-win solutions and common development. We know we cannot and must not make it on our own. This is not only out of necessities of interdependence. It is also deeply rooted in the time-honored belief of the Chinese people in the pursuit of harmony, which naturally applies, first and foremost, to our immediate neighbourhood.

Let me turn to the relationship between Mongolia and China.

What brings the two countries together goes far beyond geography, although the 4700 plus km border we share, the longest we have with any other country in the world, is really something to be reckoned with. As people often say, we didn't exactly choose to become neighbours. But the two of us have indeed made a deliberate and clear common choice to be good neighbours, good friends and above all, good partners.

When Prime Minister Batbold visited China last June, the two governments agreed to upgrade the bilateral relationship to a strategic partnership. The decision is about much more than a simple nomenclatorial change, as it has profound and far-reaching implications: while there is no guarantee that the relationship will from now on be problem-free, it signifies the commitment on both sides to embracing a new era of comprehensive, in-depth, stable and sustainable development in the evolving relationship.

The new partnership is built on three major pillars, the first of which is political trust and confidence, based on respect and support for each other's sovereignty, independence and territorial integrity.

The second pillar is mutually beneficial economic cooperation, which I shall dwell upon at greater length a bit later.

The third pillar is people-to-people exchanges, which sits at the very heart and cuts to the very foundation of the partnership.

Let me focus now on the economic dimension of the partnership.

Arguably, trade and investment have been the most dynamic driver powering the advancement of the relationship. For both countries, growing the economy and bettering the life of the people is an urgent top priority. The hard truth is economic development is not only an imperative unto itself. It also helps to pave the way for solving lots of the other problems that may occur.

That shared commitment to development, on top of a highly complementary structure of the two economies plus the unique geography, and the very fact that both are growing robustly provide ample room and opportunities for win-win collaboration between Mongolia and China in an open, non-exclusionary setting.

China has been the largest trading partner and investor in Mongolia for many years. The bilateral trade volume increased 10 times during the past decade, reaching 6.3 billion US dollar last year, more than double what it used to be a year ago, and bucking the trend of slowdowns or even downturns across the world.

For all this, however, the level of cooperation between the two countries falls far short of the huge potential that exists. And for this potential to be tapped, both sides will have to make a conscious and strenuous effort to build on the respective comparative advangtages for mutual benefit in a sustainable manner.

During Premier Wen Jiabao's visit to Mongolia in 2010, the two governments agreed on a three-in-one integrated approach, combining resources development, infrastructure construction and financing cooperation. This formula has been proven to work in many other countries for all stakeholders. Its implmentation holds the key to early, actual and substantive progress on the ground.

In addition, we understand and support Mongolia's aspirations for the development of national industry by extending the value chain to downstream processing.

Finally, let me touch briefly on coal.

As a pillar industry, Coal Mining is becoming probably the most important engine of the Mongolian economy. It has also acquired correspondingly greater prominence in China-Mongolia economic cooperation.

Last year, China imported 20.7 million tons of coal from Mongolia, with an increase of 23.2% on the previous year, accounting for 11.3% of total coal import of China. I am sure crossborder trade in coal and coal-based processed products, be it ending up on the Chinese market or targeted at third-country markets through China, will in future see further significant or even exponential growth.

At the same time, the coal mining industry in Mongolia faces its fair share of problems and challenges.

For one, early progress on key projects is crucial, the impact of which will not be confined to the individual projects themselves. They will help to open doors for further investment and cooperation.

A second challenge would be to improve connectivity through seemless, efficient and low-cost railway and road links and border-crossing facilities, the lack of which has turned out to be one of the biggest bottlenecks for crossborder trade in coal.

Last but not least, the importance of a favourable policy and legal and regulatory environment, including necessary and appropriate incentive structures cannot be over-emphasized.

These are obviously not problems or challenges for Mongolia to deal with alone. With Mongolia taking the lead, all other stakeholders should make a contribution. China, as a strategic partner of Mongolia, stands ready to play our part.

In concluding, I wish the Second International Coal Investors Conference and Exhibition a success.

Thank you!