Speaking of Happiness, check out the Domestic Advisor. Beshbalik's anger is a sign of things to come! Hooking up gold will settle things down a bit, but it's only a temporary patch.
My solution? Religious techs.
Everything else is peachy. Our Health is almost double our Pollution at the moment, and neither of our neighbors has Iron Working yet, giving us a nice lead in tech so far. Major early happiness, though, require Monarchy, and we are sorely lacking on it.
I recommend a rush to Meditation>Priesthood>Monarchy ASAP, so we can switch to Hereditary Rule before our other cities strain at the Happiness Limit. Tech trades aren't efficient at the moment; both civs will only trade Meditation, and everything we can offer is worth 2-3x more than it.
Also, Priesthood will let us build the Oracle, which we stand a chance of finishing once we can hook up the Marble near Karakorum (I'd send a worker down now; it'll expand in 4-5 turns.) We could build it in Turfan, whose hammers match Karakorum (the extra culture would also help the border battle with Hatty) and finish it in about 3-5 turns. We should finish it right after we learn Monarchy, which is doable with proper timing. That would let us rush Feudalism, giving us early access to Longbowmen, Feudalism, and Serfdom. Producing 3-promotion units out of the barracks is sick, especially if we can do it before everyone else, and +50% worker rate will help us rapidly civilize our growing empire.
Also, a Great Person will pop in Karakorum in 5 turns. I'd recommend a pause after he does so we can decide what to do with him.