Study Of A Gravity Problem For Trade Between Mongolia And China

Foreign trade in our country (Mongolia) is increasing rapidly. The total turnover of foreign trade became27.3billion dollars in last four years (2008-2011). In particular, a total turnover of11.4billion dollars in2011is2.7percent than the total amount (11.1billion dollars) in2004-2007. The amount in2008-2011increased by2.5times compared to the total amount in2004-2007. The vast majority of foreign trade turnover is mostly related to and depends on our neighboring countries, namely, China and Russia.The foreign trade turnover of Mongolia and China reached14.3billion dollars in last four years (2008-2011). In particular, the total turnover of6.4billion dollars in2011is31percent than the total amount (4.9billion dollars) in2004-2007. The amount in2008-2011increased by nearly3times compared to the total amount in2004-2007. For Mongolia, The People’s Republic of China is the largest partner of the foreign trade.According to the research results carried out by gravity model, we could say that it is possible to increase the trade turnover of Mongolia by86.7percent approximately. In particular, the results show the possibility to increase the amount of foreign trade with China, Russia, South Korea, Japan and neighboring countries by84%-96%.