Research On Foreign Direct Investment Effect In Mongolian Mining Sector

Mongolia has small population compared to wide territory, and is rich in natural resources and also has advantage of developing the economy of resources. Due to the restrictions of Mongolian economy and the level of science and technology, the exploration and infrastructure in mining sector are rather backward. Therefore, it is necessary to attract abundant funds and advanced technology through foreign investment. After 90s in the last century, Mongolian government promulgated number of open and preferential policies for foreign investment in order to attract foreign investment.Mongolian economic development is related to livestock husbandry and mining industry, when the mineral products price on the international market has risen, the mining sector has played more and more important role in Mongolian economy. In 1998 Mongolia promulgated "mineral resources law", after that Mongolian foreign investment has been concentrated in the mining industry, and the proportion of mining sector in GDP reached 17% in 2013. Mineral resources make huge contribution to Mongolia’s economy so that it presents the obvious characteristics of resources. However, the international market of mineral products prices fluctuate greatly, which also makes the economic development of Mongolia cast a layer of strong uncertainty, but also vulnerable to the impact of the international market. The impact of the international market price reduction in 2012 is an example. Thus Mongolia’s mining investment in the opportunity is still in risk. In addition, the investment of Mongolia mining industry still faces problems such as the permit market confusion, imperfect laws and poor infrastructure and other problems. Therefore, in order to speed up the pace of foreign investment in Mongolia mining sector, we must find out series of effective measures to solve the existing problems. So this research paper will study foreign direct investment in Mongolian mining sector, hope that will set the strategy and suggestions to maintain mining investment through the analysis of foreign investment in the mining sector.This research paper based on the international trade and economy, foreign investment, and other scientific knowledge, using the literature analysis method, induction and deductive method and international investment theory to carry out Mongolian mining sector’s foreign direct investment research. Firstly, this paper analyzes the current situation and investment environment of Mongolian mining sector and difficulties of foreign direct investment in Mongolian mining sector, and tries to put forward some feasible suggestions.