The bilateral relations between the Mongolia and the People's Republic of China have long been determined by the relations between China and the Soviet Union, Mongolia's other neighbour and main ally until 1990. With the rapprochement between the USSR and China in the late 1980s, Sino-Mongolian relations also began to improve. Since the 1990s, China has become Mongolia's biggest trading partner, and a number of Chinese businesses are operating in Mongolia.
Throughout history, Mongolia and China have had complicated relations. The Great Wall was constructed to ward off the northern nomads attacks, from the Huns during the Qin Dynasty, the Turks during Tang, and certainly the Mongolian and Central Asians later on. In 1279, Mongols under Kublai Khan, grandson of Genghis Khan, conquered all of China and established the Yuan Dynasty. In 1368, the Chinese under the Ming Dynasty successfully expelled the Mongols from China and in 1388, Sacked the Mongol capital at Karakorum. During the Ming Dynasty, the Great Wall was strengthened and the period was characterized by repeated Mongol raids into China and vice versa. In 1644, the Ming Dynasty was overthrown by peasant rebels under Li Zicheng, who established the short lived Shun Dynasty which would soon be replaced by the Qing Dynasty. During the Qing Dynasty, Mongolia was incorporated into the empire. With the fall of the Qing dynasty in 1911, The Republic of China was established and Mongolia declared its independence after more than 200 years of foreign rule. During this period, the Republic of China as the successor to the Qing, claimed Mongolia as Chinese territory however lacked any stable control over the region due to massive civil wars in the south and the rise of the Warlord Era. Consequently, Mongolia (the Outer Mogolia) sought Russian support to reclaim its independence. In 1919, Chinese general Xu Shuzheng advanced into Outer Mongolia and annulled the independence. In 1921, Chinese forces were driven out by White Russian forces led by baron R.F. von Ungern-Sternberg. Some months later they were driven out by the Red Army of the Russian Soviet Federative Socialist Republic, the Far Eastern Republic and pro-Soviet Mongolian forces. In 1924, the Mongolian People's Republic was proclaimed. With the onset of the Japanese invasion of China, little effort was given to reestablish Chinese control over Outer Mongolia. During the end of WWII, Republic of China, lead by Chiang Kai-Shek' Nationalist Party (Kuomintang, KMT), was forced to formally accept the Outer Mongolian independence under the Soviet pressure. In 1949, the Communists won the Chinese Civil War and inherited the status of independence.
The People's Republic of China established diplomatic relations with Mongolia on October 16, 1949 and both nations signed a border treaty in 1962. With the Sino-Soviet split, Mongolia aligned itself with the Soviet Union and asked for the deployment of Soviet forces, leading to security concerns in China. As a result, bilateral ties remained tense until 1984, when a high-level Chinese delegation visited Mongolia and both nations began to survey and demarcate their borders. In 1986, a series of agreements to bolster trade and establishing transport and air links were signed. In 1988, both nations signed a treaty on border control. Mongolia also began asserting a more independent policy and pursued more friendly ties with China. Mongolia has always been suspicious that China wants to claim Mongolian territory, and concerned by fears of China's overpopulation pouring into Mongolian territory.
In the Post-Cold War era, China has taken major steps to normalize its relationship with Mongolia, emphasizing its respect for Mongolia's sovereignty and independence. In 1994, Chinese Premier Li Peng signed a treaty of friendship and cooperation. China has become Mongolia's biggest trade partner and source of foreign investment. Bilateral trade reached USD 1.13 billion by the first nine months of 2007, registering an increase of 90% from 2006. China offered to allow the use of its Tianjin port to give Mongolia and its goods access to trade with the Asia Pacific region. China also expanded its investments in Mongolia's mining industries, giving it access to the country's natural resources. Mongolia and China have stepped up cooperation on fighting terrorism and bolstering regional security. China is likely to support Mongolia's membership in to the Asia Cooperation Dialogue (ACD), Asia-Pacific Economic Cooperation (APEC) and granting it observer status in the Shanghai Cooperation Organization.
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