Two countries ink deal to ship coal using rail network

China and Mongolia vowed on Friday to strengthen cooperation in interconnection, as the northern neighbor reportedly seeks another link to the Pacific Ocean aside from Tianjin.

The two nations also signed a string of documents including a deal to ship coal from Mongolia to China by rail to lower the transportation costs.

Premier Li Keqiang and his visiting Mongolian counterpart Norov Altankhuyag witnessed the signing ceremony after a meeting at the Great Hall of the People.

"(The two countries should) develop an overall plan for railways and roads as well as natural gas, electricity and transportation linking the two nations," Li said during the meeting.

He also said Beijing is willing to hold discussions with Ulan Bator on a free trade area around the border.

Si Lige, a researcher on Mongolian studies with the Inner Mongolia Academy of Social Sciences, said that the document on coal transportation by railway, signed by Chinese and Mongolian companies, shows that Ulan Bator aims to strengthen energy cooperation with China to consolidate other forms of cooperation.

Because of a price dispute and competition from Russia and Australia, Mongolia's coal exports to China fell last year, Si said.

Observers expect the progress of Mongolia's growing rail system and its efforts to improve interconnection with China will help the country enter an era of massive coal development and increase coal exports.

Altanhuyag is on his first official visit to China since taking office in 2012. He also met President Xi Jinping and top legislator Zhang Dejiang on Friday.

Vice-Foreign Minister Liu Zhenmin told reporters on Friday that in his China visit Altankhuyag also traveled to Chengdu, capital of Sichuan province, for the Western China International Fair.

He then visited Northeast China's Liaoning province, a move that Mongolian media said aims at opening a new route to the sea.

"The schedule shows that Mongolia is adjusting its traditional cooperation plan with China," said Si.

In a recent interview with Xinhua News Agency prior to his visit to China, Altanhuyag said that Mongolia will actively participate in the construction of a "Silk Road Economic Belt".

In September President Xi raised the idea of the economic belt, similar to the ancient Silk Road of more than 2,000 years ago, as a means to boost cooperation between China and Eurasian countries.

China has been Mongolia's largest trade partner and investor country for many years.

Zhang Fan contributed to this story.

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