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For Mongolia, China's Slowdown Is Provoking Emergency Response

  • With 88% of exports winding up in China, Mongolia badly hurt
  • China's neighbor looking to sell power plants, postal service
Sheep and goats graze in a field in Tuv province, Mongolia, on Sunday, Aug. 9, 2015. Mongolia's economy slowed in the first half of the year to the weakest pace since it contracted in 2009, as foreign investment fell amid disputes with overseas firms.
Photographer: SeongJoon Cho/Bloomberg

While China’s slowing economy has singed stock markets around the world, no nation is more affected than neighboring Mongolia. Things have gotten so bad that the government in this mineral-rich nation is planning job and salary cuts for bureaucrats, and the sale of of shares in state-owned companies including the postal service.

Mongolia, sandwiched between China and Russia, is an early illustration of fallout from slower growth in the world’s second-biggest economy. “When China sneezes, we get a cold. That is how the situation is. It really affects us in a major way,” Dale Choi, founder and director of the research firm Independent Mongolian Metal & Mining Research, said in a phone interview.