All Rights Reserved. The growing financial ties between China and Yugoslavia appear to be extending the life of President Slobodan Milosevic's regime and undermining Western efforts to limit his access to hard currency. Economists believe the amount should be enough to forestall hyper-inflation for six months and allow the government to pay pensions as well as military and police salaries for several months. Later, it was called a commercial loan.
Many observers are skeptical of both explanations.
Serbian companies reportedly began moving money from banks in Cyprus and other Western countries to those in Shanghai and Hong Kong in the summer of 1998, anticipating that clashes between the Yugoslav Army and the Kosovo Liberation Army would renew international sanctions. But it's not just money that is moving from China to Belgrade. Every week, it seems, a Yugoslav Airlines jet arrives in Belgrade with a new Chinese delegation. Officials from Beijing are among the few diplomats and statesmen still willing to meet with Milosevic. Meanwhile, Serbia opened a consulate in Shanghai last year and the Yugoslav minister for cooperation with international financial organizations, Borka Vucic, was recently in Beijing to strengthen Sino-Serbian ties.