Page 20 - bne IntelliNews monthly magazine September 2024

20 I Companies & Markets bne September 2024
or MNT. They hold US dollars in their reserves and also need US dollars to service foreign debt. Dollars are also required to repatriate earnings to investors, purchase new equipment for the mines and pay foreign experts who have the skills necessary for mining and other critical sectors.
Apart from mineral exports, cashmere, meat, milk and leather, Mongolia produces very little in the way of finished products and is forced to import everyday needs like shampoo, packaged foods, vegetables and fruit from abroad. These imports must be paid for in US dollars.
The tughrik is nonconvertible and has been steadily losing value over the past four years, so exporters are unwilling to accept tughrik as payment for Mongolia’s imports. While trading with Russia in rubles would leave Ulaanbaatar with a currency useless for other international trade, accepting some limited quantity of yuan for mineral exports could make sense if matched with imports from China paid in yuan. However, holding excess yuan is impractical due to its semi-convertibility.
Despite propaganda, Mongolia's trade with Russia and China continues to be largely in dollars. The use of yuan might increase somewhat, but for the most part, Ulaanbaatar needs to continue to trade in dollars. Mongolia's strategic location between Russia and China presents both opportunities and challenges. While its reliance on the US dollar for trade provides stability and access to global markets, Mongolia must also navigate the economic influence of its neighbours.
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Durov charged on 12 counts of complicity in illegal activity on Telegram
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Russian internet entrepreneur Pavel Durov has been charged with 12 counts of failing to cooperate with
a French police investigation and complicity in a number of crimes, including drug trafficking, distribution of child pornography and fraud, according to the French charge sheet released on August 26.
Durov, founder and chairman of messaging service Telegram, has already been questioned on the 12 charges in a French prison, according to the cybercrime department of the Paris
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China's Belt and Road Initiative (BRI), the China-Mongolia Economic Corridor (CMEC) and the Power of Siberia 2 gas pipeline, which is to connect Russia and China through Mongolia, have led to increased investment and infrastructure development in Mongolia, further integrating the three economies. This relationship encourages some trade in yuan, especially for transactions directly tied to Chinese investments.
However, Mongolia remains cautious about over-reliance on the yuan due to the mentioned semi-convertibility and potential economic leverage presented to China.
Simultaneously, Mongolia's historical and economic ties with Russia necessitate careful management of ruble transactions, especially given the ruble's limited international acceptance. Thus, Mongolia's economic policies reflect a balancing act between leveraging regional opportunities and maintaining economic sovereignty through dollar-based trade.
Antonio Graceffo, PhD, China-MBA, is an economist and China analyst. He has spent over 20 years living in Asia, including seven years in China, three in Taiwan and four in Mongolia. He conducted post-doctoral studies in international trade at the School of Economics, Shanghai University, and holds a PhD from Shanghai University of Sport, and a China-MBA from Shanghai Jiaotong University. Antonio has authored seven books on Asia, with a focus on the Chinese economy.
Russian internet entrepreneur Pavel Durov has been charged with 12 counts of failing to cooperate with a French police investigation and complicity in a number of crimes, including the distribution of pornography and drug trafficking.
prosecutor’s office. Durov was detained on August 24 at 20:00 local time after deplaning at the Le Bourget airport in Paris.
The charges are as follows:
• Aiding and abetting in the administration of an online platform for illegal transactions
• Refusal to provide information or documents required for inter- ception authorised by law at the request of authorised bodies