I promised before that I'll present a cheaper way than the international train to get from Ulaanbaatar on to China. But after doing it and all its obstacles, I'm not sure if I'd suggest it any more.
Taking the normal train route on the transmongolian train, the way from Ulaanbaatar to any place in China is quite expensive. Our hostel offered us a train ticket to Jining (濟寧市) or Datong (大同市) for about 140 $. It would've probably been a bit cheaper at the train station, but still it's quite expensive.
Some people in the Hostel told us about a cheap alternative: Taking a local train to the border town Zamyn-Üüd (Замын-Үүд), then going with a Jeep through the border and then using a bus from Erenhot (二连浩特, also called Erlian) to Hohhot (呼和浩特, ᠬᠥᠬᠡᠬᠣᠲᠠ). However, it turned out that it wasn't that simple.
The ticket for the local train to the border costed 10.000 ₮ (about 7 €) for a hardsleeper. But it came with an unplesant surprise: They sell more "hardsleeper" tickets than there are hardsleepers in the train. So having a hardsleeper ticket with a reservation number does not mean that you have your sleeper for sure. For every two sleepers, three tickets are sold. We ended up having the lower beds and we could use them, but regularly people were sitting at the foot end of our sleepers.
We wanted to go on from Zamyn-Üüd to Erenhot and were confronted with the next unplesant surprise: It was the first of June - international childrens day - and that's a national holiday in Mongolia and the border check is closed. So we were stuck in Zamyn-Üüd for a day longer.
In the evening, we saw the local way of "waste treatment": They just burned it openly. Mongolia is a country which has a lot of problems with air pollution (this is especially a problem of the capital city Ulaanbaatar, but I doubt it's much different there) - it would probably be easy to do this at least a bit better.
The next day, we went on with a jeep to the chinese border town Erenhot. In the end, we payed 10.000 ₮ (about 7 €) per Person plus a small fee at the chinese border I payed with a dollar due to the lack of any chinese or mongolian money.
There's not so much to say about Erenhot - the city is very fond of Dinosaurs (because some were found nearby in the Gobi desert) and has a couple of Dinosaur monuments.
Now with that mysterious bus - I read on several places in the Internet that there exists a bus line between Erenhot and Hohhot, however none of them had anything to say where this bus departs, where you can buy a ticket or where you can find any information at all. It also turned out that communication here was a much bigger problem than thought - I think we didn't meet a single english-speaking person at all. So we ended up using a train to Hohhot, which was also quite cheap and comfortable.
We went to Hohhot not because of anything interesting there, it was just a stop to go on, as there aren't many options for further travelling from Erenhot. It turned out the People's Park there was quite nice and it was our first experience with a bigger chinese city. Afterwards, we went on to the south of China.