CHINA AND SERBIA: Serbian-Chinese liaison

The Economist, February 5, 2000

B E L G R A D E

WHO said Serbia was isolated? At the bustling Rezhisor caf in one of
Belgrades concrete suburbs, a teenage waitress confides that she is
learning a foreign language to communicate with customers: not English or
German but Chinese. Around her, Chinese men smoke, drink tea and talk
on
mobile phones. In the ill-lit shopping mall outside, Chinese vendors sell
Chinese-made clothes, toys, umbrellas and other goods to Serb customers.

As parts of Yugoslavias depressed and chilly capital turn into an
unromantic sort of Chinatown, the importance of President Slobodan
Milosevics most promising diplomatic friendship is becoming clear. Every
Thursday, a Yugoslav aircraft flies from Belgrade to Beijing and brings
back a new delegation from China. As many as 300 Chinese a day have
applied
for Yugoslav residence permits.

Nor are relations confined to cross-cultural exchanges over crispy noodles.
In December, the Yugoslav government triumphantly announced that $300m
in
grants and very soft loans had been transferred to its coffers from China.
The exact source is a mystery: some believe it may originally have been
Serbian money, sent abroad for safe keeping.

In any event, the money from China has helped to slow down the dinars
dive, which might have provoked hyperinflation. Mladjan Dinkic, a dissident
economist, reckons the inflationary dragon can now be kept at bay for six
months.

The seeds of Serbias friendship with China were sown by Mira Markovic, the
presidents influential wife, who went to China three years ago and loved
its mixture of Marxism, the market and firm government. The partnership
was
sealed in fire last May when NATO bombed the Chinese embassy in
Belgrade,
setting off a wave of anti-American rage in China. Though China has
resumed
military exchanges with the United States (by sending a delegation to the
Pentagon last week), and has accepted an offer of compensation, it still
insists the bombing was deliberateand is snuggling up to Serbia as a
fellow victim of NATO.


_______
Macdonald Stainsby
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