(BLOOMBERG) - China postponed bilateral meetings with Mongolia indefinitely after its North Asian neighbour allowed a four-day visit by Tibet's spiritual leader, the Dalai Lama.
The two sets of talks originally scheduled for next week were seen as crucial for Mongolia to access badly-needed Chinese loans and development projects.
"The meeting was intended for negotiations on soft loans and the projects on Tavan Tolgoi railroad, a copper plant and coal gasification project. Unfortunately, the Chinese side responded that this visit was unacceptable," Munkh-Orgil Tsend, Mongolia's foreign minister told reporters in Ulaanbaatar on Thursday (Nov 24).
A traditionally Buddhist nation that has deep historical ties to Tibet, Mongolia has hosted the current Dalai several times since 1979. Past visits have been met with reprisals from Beijing, which considers the Dalai Lama to be a separatist leader and routinely condemns nations that give him a platform to speak.
The visit, which concluded earlier this week, was purely religious in nature, said Munkh-Orgil, adding that it had been organised by Gandan Monastery and the government had played no role in the invitation.
China also cancelled a bi-annual consultative meeting between the two countries' Parliaments, said Munkh-Orgil. Preparations for a planned visit by Mongolian Prime Minister Erdenebat Jargaltulga to China next year are also in doubt, he added.
Since it declared its economy in crisis in August, Mongolia has been seeking emergency loans from bilateral partners and international financial institutions including China and the International Monetary Fund.
The nation's budget deficit has more than doubled this year to US$1 billion (S$1.4 billion) while gross domestic product contracted by 1.6 percent in the first nine months.