China will further expand economic and trade cooperation with the neighboring country of Mongolia, particularly in mineral resources exploration, infrastructure construction and the financial sector, a senior Chinese leader said on Wednesday.

Wu Bangguo, China's top legislator, made the remarks when meeting with his Mongolian counterpart, Zandaakhuu Enkhbold, chairman of the State Great Hural, in Ulan Bator. Wu arrived in Ulan Bator on Wednesday for the first visit by a top Chinese legislator to Mongolia in 16 years.

Experts said the two-day goodwill visit provides an excellent opportunity to foster closer parliamentary ties between China and Mongolia.

Wu also said China supports Mongolia bid to be an Asia-Pacific Economic Cooperation member and is willing to help Mongolia become better involved in regional cooperation in Northeast Asia and have stronger collaboration with Shanghai Cooperation Organization members.

Enkhbold said developing friendly relations with China has been the common stance and strategic choice of the Mongolia government and Parliament. He signed an agreement with Wu on Wednesday to promote closer communication between the two parliaments. The two countries also signed agreements in economic and technology cooperation, but no details were given.

In his latest interview with Xinhua, Chinese Ambassador to Mongolia Wang Xiaolong said Sino-Mongolian relations are at their best level in history, and the two countries maintained frequent high-level exchanges in 2012.

Xing Guangcheng, a researcher of Central Asian studies at the Chinese Academy of Social Sciences, said with no significant divergences in politics, the two neighbors are expected to seek an integration of bilateral interests. Ulan Bator has long sought a diplomatic balance by actively developing ties with countries like the United States and Japan to offset its overdependence on Russia and China, he said. Participation in regional organizations like APEC and SCO will help Mongolia readjust its role in Northeast Asia and its strategy with neighboring counties, Xing said.

However, Xing said as a country in transition, Mongolia has not yet fostered a sound investment environment, with some loopholes in its legal system. He said Chinese enterprises should study the risks before conducting economic activities with Mongolian counterparts.

Aluminium Corp of China, or Chalco, on Monday threatened to take legal action if a state-owned Mongolian company unilaterally breaks a long-term coal supply contract.

Mongolia's Ambassador to China Tsedenjav Sukhbaatar told The Wall Street Journal on Friday that the pricing terms of the deal, which he said capped Mongolia's coal exports at $70 a metric ton, were "unacceptable in the sense of normal international trade".

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