The Global Times,
a daily Chinese newspaper focusing
on international issues and produced by the official Chinese Communist Party newspaper, the People”s Daily, has
published in some detail the views of Michael Aldrich, an American  lawyer who divides his time between
Beijing  and Ulaanbaatar, on the
development of Mongolia”s mining-dependent economy. The lawyer feels that the
Mongolian Government has realized that the country cannot properly develop
without the flow of considerable capital northwards from China. It also wants
to diversify the sources of foreign capital so no one country becomes the
“key” investor.

He thinks “a considerable amount” of the present Chinese
investment comes from privately-owned companies that side-step Chinese overseas
investment regulations through nominee shareholder arrangements. These
companies “often step on the toes of Mongolian sensitivities by seeking to
circumvent local laws and customs”. Chinese state-owned firms are more
slow-paced since they cannot avoid the red tape.

Asked how legal work in Ulaanbaatar compares to that in
Beijing, Aldrich said there are some similarities. The legal systems of all
former-socialist states tend to have much in common, but Mongolia has a greater
respect for the freedom of individuals who enter into contracts without
obtaining governmental agency approval, or those who don”t necessary comply
with regulatory restrictions that may or may not be enforced. Establishing a
wholly owned subsidiary with foreign investment in Mongolia can be completed in
several days, as opposed to the weeks of processing required in China.