Here's an overview of the surrounding area:
Dark Blue = Mongolia
Dark Green = Russia
Light Blue = Alash Orda
Green/Brown = Xibei San Ma
Light Yellow = Tibet
Pink = Nepal
Gray/Green = Bhutan
Red = Shangqing Tianguo (spelling?)
Orange = Yunnan
Light Green = AlgOstAsien, German puppet
Grey = Qing Empire
Purple = Germany
Yellow = Japan
Brown = Manchuria, Japans puppet
First event, and it's already getting hot here. Of course we need to unify ALL of the Mongolians! This is Mongolias first, small step on it's way back, after endless years in the shadows of Russia and China. Meanwhile, the mongolian cavalry divisions are being upgraded to modern standars.
An envoy is sent to our tibetan brothers in... eh Tibet, asking for a military alliance in case of war with the chinese warlods to the south. Tibet accepts and are given blueprints of Early Mountain Division as a sign of our friendship.
After upgrading all cavalry divisions, production of a new cavalry division and two industries is ordered. If Mongolia is to compete with it's (mostly) evil neighbours, troops and industry will be required.
And so it it happens, the reaction of Xibei San Ma was as expected. WAR! A quick strike against the important city of Urumqi is launched, as well as an attack against Bayan Nur which is strategically important. Mongolian cavalry enters Urumqi on May 4th without meeting any resistance at all, and ten days later, Bayan Nur is secured too.
Even before war started, Mongolia had plans for quickly overrunning Xibei San Ma:
3. Light Blue
4. Light Green
Far away from the frontline, two industries are finished, and construction of four new industries starts.