
In early 20th century relation of China and Mongolia led to hopeful situation. The People's Republic of China established diplomatic relations with Mongolia on October 16, 1949 and both nations signed a border treaty in 1962. As a result, bilateral ties remained tense until 1984, when a high-level Chinese delegation visited Mongolia and both nations began to survey and demarcate their borders. In 1986, a series of agreements to bolster trade and establishing transport and air links were signed. Mongolia also began asserting a more independent policy and pursued more friendly ties with China.

In the Post-Cold war era, China has taken major steps to normalize its relationship with Mongolia, emphasizing its respect for Mongolia's sovereignty and independence. In 1994, Chinese premier Li Peng signed a treaty of friendship and cooperation. China has become Mongolia's biggest trade partner and source of foreign investment. China offered to allow the use of its Tianjin port to give Mongolia and its goods access to trade with the Asia Pacific region. China also expanded its investments in Mongolia's mining industries, seeking to exploit the country's natural resources. China is likely to support Mongolia's membership in to the Asia Cooperation Dialogue (ACD), Asia-Pacific Economic Cooperation (APEC) and granting it observer status in the Shanghai Cooperation Organization.

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