China, Inner Mongolia and… (Outer) Mongolia?


Misconceptions around this topic abound, starting with the very status of Mongolia itself.

Is Mongolia an independent nation? Yes.

Is Mongolia a part of China? Kind of.

Does “Outer” Mongolia exist? Kind of… but not really.

If you were not confused by now, you most certainly are at this point, so it is time to put a crystal-clear explanation on the table and we will start with a short history lesson.

First and foremost, we need to state that Mongolia’s declaration of independence occurred back in 1911, after the collapse of the Qing Dynasty (for more information about Chinese dynasties, click HERE) but unfortunately for the newcomer state, it was rather short-lived due to the fact that that China quickly occupied a part of Mongolia, a state of affairs that persisted until Russia stepped in and invaded the territory in 1920, expelling the forces of China.

What followed was another declaration of independence on the 11th of July 1921, with the Russians supporting an independent* (relatively) communist government. On the one hand, this complicated USSR relationship brought about its own share of issues, including atrocities and bloodshed, with Mongolia not representing an exception when it came to the Great Purge of Iosif Vissarionovici Stalin in the thirties for example. At the same time, Soviet protection enabled Mongolia to remain independent, with the USSR even defending Mongolia from Japanese invasion and pressuring the international community before joining the Allies to ensure that Mongolia remains independent. To this day, Russian is the most popular foreign language in Mongolia.

Please note that up until this point, we have been referring to the nation of Mongolia, an independent country which controls a very significant territory in terms of size, but with a population density so low that it represents the world’s most sparsely-populated independent nation.

Mongolia should not be confused with Inner Mongolia, the #3 subdivision of China in terms of size (over one million square kilometers), a so-called Autonomous Region of China which was created in 1947. Its population is primarily Han Chinese, with the most significant minority being, of course, Mongol. Economically speaking, it is a remarkably prosperous subdivision of China, number four across the 31 provinces of China, with only Shanghai, Tianjin and Beijing surpassing it. It can be considered a major player when it comes to all things energy-related, from highly polluting energy types such as coal to having the #1 wind energy generation capacity in China.

In a nutshell: Mongolia is a large but sparsely-populated independent nation, whereas Inner Mongolia is a prosperous Autonomous Region of China.

But what about “Outer” Mongolia?

If we are to be thorough, we will say there is no such thing at this point in time. In the present, some people tend to refer to Mongolia as either Outer Mongolia or North Mongolia for practical reasons, primarily so as to create an Inner Mongolia – Outer Mongolia contrast. Historically speaking, however, the term “Outer Mongolia” can and should be used, with Inner as well as Outer Mongolia being included in the empire as of 1691 (Qing Dynasty).

To make things even more straightforward as far as the present is concerned:

  1. Mongolia = independent nation (with Russia as a northern neighbor and China as a southern neighbor, or more specifically Inner Mongolia)
  2. Inner Mongolia = Autonomous Region of China
  3. Outer Mongolia = no such thing (anymore)

As tends to frequently be the case when it comes to all things geopolitics-related, “confusion” seems to be the operative word if the average observer limits himself to taking a step back and trying to make sense of it all. Upon digging deeper and understanding some historic subtleties, everything starts making quite a bit more sense.

Think of the Mongolia + Inner Mongolia equation as one piece of the China puzzle.

Is it the most important one? Most definitely not.

Can you meaningfully understand China without knowing all that much (or anything, really) about its neighbor Mongolia or about the Autonomous Region Inner Mongolia? Probably.

Should you? No, for the simple reason that here at, we don’t believe in simply providing the bare minimum in terms of information. When in doubt, take a look at our “New Here” section and the sheer number of articles it contains. To put it differently, you can become reasonably competent at understanding “all things China” without paying attention to topics such as this one but it would be severely sub-optimal.

If you are serious about doing your proverbial homework as an investor properly, provides an arsenal of information which enables you to do just that. Or, of course, we would happily go the extra mile and handle everything for you, should our visions align. For more information about what we can do, visit our Consulting section and to get in touch so as to at the very least book a preliminary appointment with our Managing Partner, visit the Contact section of