Mongolia initiated an independent foreign policy after the Soviet Union’s collapse in 1991. Economic difficulties caused by the abrupt loss of Soviet support were overcome with aid from Japan and the US, as Mongolia found itself at the center of Great Power interests in Northeast Asia. Mongolia continues to search for a good solution to balance her neighboring powers, but China’s steadily growing political and economic influence makes this a perennial challenge. The case of the Dalai Lama’s 2016 visit to Mongolia illustrates well how Chinese economic influence can stretch into Mongolia’s spiritual sphere.
Mongolia joined the Shanghai Cooperation Organization with observer status, but China encourages Mongolia to upgrade to full SCO membership. Mongolia’s declaration of permament neutrality at the UN in 2015 could be seen as a countermove. Maintaining a well-balanced foreign policy will remain a significant issue for Mongolia for the foreseeable future.
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